Canexpo

Dhirendra Kumar

Background
Canexpo, a specialty equity fund from Canbank Mutual Fund invests in export-oriented units and companies with strong forex earnings. Canexpo is not a sector fund. Launched as a five-year closed-end fund in February 1994, the fund was converted into an open-end structure in May 1999. The fund paid a 10 per cent dividend in December 1999 and 12.5 per cent in June 2000.

Performance
Canexpo has an average performance track record with an annualised return of 11.70 per cent since launch. The fund was launched at the end of the market's bull phase of 1994, which was followed by the four-year long bear grip. In line with the market, the fund was above par only for a few months. But in a falling market, the fund lost ground and was saddled with a sizeable quota of illiquid small cap IPO stocks. By December 1996, Canexpo lost 50 per cent of its asset value.

Though the fund remained below par till December 1998, the portfolio revamp initiated in 1997 helped it outperform the broad indices beginning 1998. The fund weeded out junk stocks in the portfolio in favour of consumer, pharmaceuticals and software stocks, adding to the fund's liquidity and focus. The fund has witnessed a remarkable turnaround since revamp.

Over the trailing three-year period ending July 31, 2000 the fund has given an annualised return of 35.31%, which is in line with top performing diversified equity funds during the period. Over the period the fund has increasingly become over-weight on technology stocks, with an allocation of 40 percent in early 1999 to a high as 60 percent in the June 2000. In July, Canexpo has reduced its exposure in favour of pharmaceutical and consumer stocks. Its sector concentration apart, the fund has consistently been overweight on its top holding -- Infosys Technologies, which has registered handsome gains over the years. As on July 31, 2000 Infosys accounts for almost 40 per cent of the portfolio.

The concentrated bets yielded the fund a whopping 240 per cent through 1999 till February 2000. On the other hand, the fund slipped 40 percent from its peak levels to its low since the ICE stocks meltdown. Despite the sharp fall, the fund has remained overweight in infotech stocks, with a 62 per cent weightage as on July 31, 2000.

Outlook
Canexpo is a small sized aggressive equity fund with a sizeable position in Infosys Technologies and overweight on technology stocks. The fund has strong gain potential with wild gyrations.

Fund Basics
Objective	Size (Cr)	NAV:16/08/2000	Exit Price	Entry Price	Total Returns(%)
Speciality	30.26	18.26	18.26	18.53	11.70%
Benchmark Comparisons (%)					11/08/2000
	1M	3M	6M	1Yr	3Yr
Fund	-16.0	-6.9	-38.8	18.3	33.6
Nifty Tot. Ret.	-13.6	0.6	-24.7	0.7	2.8
Sensex	-14.4	-1.4	-29.4	-7.9	-2.2
Obj. Avg.	-11.8	-3.3	-27.8	-6.3	33.6
Top Holdings (31/7/2000)					Net assets (%)
Infosys Technologies					39.09
S S I					9.25
Hindustan Lever					4.27
Cipla					3.36
Aptech					3.20
Videsh Sanchar Nigam					3.01
Ranbaxy Laboratories					2.95
Siemens					2.53
Britannia Industries					2.50
Hughes Software Systems					2.16
Digital Equipment (India)					1.89
Tata Iron & Steel Co.					1.68
Zee Telefilms					1.54
Hoechst Marion Roussel					1.51

Source: Value Research

Fund File

Money

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