The fund's NAV has risen from Rs 13.41 on March 31, 1999 to Rs 19.07 onMarch 31, 2000. The fund's strategy of high weightage to the ICE sector haspaid rich dividends as the stock market saw a prolonged bull run with theSensex scaling past the 6000-level. The rally was in fact led by the ICEsector and the valuation of this sector had undergone a dramatic change.

Software and media stocks were going through the roof. Nevertheless, therecent fall in new economy stocks (led by Nasdaq) has affected theperformance of the fund. From Rs 19.07 as on March 31, 2000, the growthfund's NAV fell to Rs 16 as on June 2. But the new economy stocks have verygood long-term growth potential and NAV should improve again once the markethits a bull phase. Also, the fund has taken exposure to unlisted companies(mainly media and software) and after their IPOs, its investment value isexpected to grow.

According to Vinod Sethi, the fund manager of Morgan Stanley Growth Fund,``We have been going through an exceptional phase in the market over thelast one year, which saw a sharp divergence on a sector-wise basis. Ourinvestment philosophy is still sector-neutral with an emphasis on investingin companies with high return on equity, enterprising management teams andsound business models.'' However, the during the period, the fund hasincreased its exposure to the new economy stocks and as on March 31, 2000,the fund's total exposure to the ICE sector has been as high as 53.66 percent. Of the total assets of Rs 1460.88 crore as on March 31, 2000, around36.77 per cent has been invested in software and data processing companies,12.91 per cent in broadcasting and publishing and 3.98 per cent intelecommunications.

The infotech stocks, in which the fund has invested, are Federal Technology(1.5 lakh shares), Hughes Software (46,400 shares), Indiainfo.Com (2.79 lakhshares), Infosys Technology (4.32 lakh shares), SSI (1.7 lakh shares), SubexSystems (1.2 lakh shares), Tata Infotech (1.07 lakh shares) and Visual Soft(18,407 lakh shares). The fund's investment in media sector includesunlisted companies like Chandamama (2.5 lakh shares) and New DelhiTelevision (1.48 lakh shares) and listed companies like CinevistaCommunications (60,000 shares) and Zee Telefilms (17.54 lakh shares).

The telecommunication companies are Global Electronic Commerce Services (12lakh shares), an unlisted company, MTNL (2.65 lakh shares) and VSNL (1.11lakh shares).

Among the top 25 holdings (which constitute 83.9 per cent of the portfolio),the top two holdings are Infosys and Zee. The stocks like SSI, GlobalElectronic Commerce Services, VSNL, Subex Systems, Hughes Software,Visualsoft also figure in the top 25 holdings of the fund.