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US-64 prunes tech exposure; RIL, RPL top holdings

Aabhas Pandya

As on February 28, 2001, Unit Trust of India's flagship, US-64 has pruned its technology exposure under 10 per cent with liquidation of holdings in NIIT, VisualSoft, Global Electronic Commerce Services, Pentamedia Graphics and Videsh Sanchar Nigam. On the other hand, the scheme cumulative investment in Reliance Industries and Reliance Petroleum has now moved to a whopping 21.32 per cent vis-à-vis 15 per cent in December 2000. Reliance Industries is also the top equity holding. The price rise in these two stocks apart, the concentrated holding could be attributed to fresh buying in Reliance companies. The February portfolio of this balanced fund reveals that the weightage of the ICE sector is down to 9.36 per cent against 13.85 per cent on December 29, 2000.

Apart from selling the five technology stocks, which had a combined weightage of 1.93 per cent, the exposure has also reduced due to a sharp fall in holdings of Himachal Futuristic, Global Tele and Zee Telefilms. The exit of US-64 from a handful of ICE stocks has helped little to stem the slide in the post-budget meltdown. The tech wreck is estimated to have eroded over 35 per cent or Rs 5.32 billion from the fund's cumulative ICE exposure of Rs 14.98 billion on February 28, 2001.

The fund's top technology pick continues to be Himachal Futuristic, with a holding of 2.13 per cent against 3.29 per cent in December last year. Himachal has been one of the worst hit in the current slump, with its share price dropping 70 per cent from Rs 670 on February 28 to the current level of Rs 211. However, the stock's weightage in US-64 has dropped less than the fall in its share price, which suggests that the scheme was purchasing Himachal at lower levels. Among non-technology stocks, US-64 has sold off Morepen Laboratories and ICICI Bank while government securities maintain their top slot in the overall portfolio with an exposure of 18 per cent.

The volatility in equity markets is driving fresh investors in hordes to US-64, given its consistent dividend track record for the last 36 years. The number of new investors have seen a 52 per cent jump from 159,000 to 242,000 for the one year ended February 2001. The net sales of US-64 were at Rs 7.89 billion, up 63 per cent from Rs 4.85 billion in the corresponding period last year. The largest fund in the Indian industry is currently not linked to its net asset value but is transacted at sale and repurchase price, which UTI fixes every month.

US-64 Top 10	Exposure ( in %)
	Feb 2001	Dec 2000
Government Securities	17.80	19.74
Reliance Industries	14.99	11.17
Reliance Petroleum	6.33	3.96
ITC	5.19	5.23
Infosys	3.09	3.07
Himachal Futuristic	2.13	3.29
ICICI	2.07	1.32
TISCO	1.85	1.84
State Bank of India	1.79	1.74
HDFC	1.64	1.07

Source: Value Research

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