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Fund Pick: Prudential ICICI Tax Plan

Prudential ICICI Tax Plan is an open-ended equity linked tax-planning scheme. Investments in the fund up to a maximum of Rs 10,000 will be eligible for a tax rebate at 20 per cent. This investment in the fund will be locked in for a minimum of three years from the date of investment.

The fund levies a 1 per cent entry load while the redemption is at net asset value. The fund has declared a maiden 60 per cent tax-free dividend for all investors in its dividend option as on March 16, 2000. Thus, an investment of Rs 10,000 at the current entry levels of Rs 25.44, will not only get a tax-free dividend of Rs 2358, but for a marginal tax-payer, there is a tax rebate of Rs 2000 as well.

The dividend alone will give a yield of 23.58 per cent. However, investors will have to assume the market-risk through the minimum lock-in period of three years.

Launched in July 1999, the fund has returned 154.4 per cent till date and in the three months ending February 2000, it has gained 50 per cent. So far, the fund has been a blend of growth and cyclical stocks without being overweight on any particular sector.

As on December 31, 2000, the fund has exposures to the sectors of software (26%), pharma (12%), FMCG (13%), telecom (6%) and media (6%). Over the past quarter, the fund has downsized its stakes in oil & gas and chemicals sectors while maintaining a decent exposure to diversified, cement and auto companies. The top ten stocks accounts for 48 per cent of the portfolio and the top 20 for 74 per cent. The fund apart from the tax breaks is also attractive for its quality and diversified portfolio. The fund should sustain its good performance in the long run.

Fund Basics
Objective	Size (Rs cr)	NAV (Rs): 10/3/2000	Exit Price	Entry Price	Total Returns
Tax planning	150	25.19	25.19	25.44	154%
Benchmark Comparisons (%)					29/2/2000
	1M	3M	6M	1Yr	3Yr
Fund	8.5	47.2	96.1	NA	NA
Sensex	4.6	17.8	11.2	NA	NA
Nat. Index	14.5	46.2	50.2	NA	NA
Obj. Avg.	14.9	69.2	139.4	277.9	88.5
Top Holdings (31/12/1999)			Value (Rs cr.)		Net Assets (%)
Mastek			9.44		7.41
Himachal			7.67		6.02
Zee Telefilms			7.23		5.68
Infosys			6.25		4.91
Peerless Shipping			5.63		4.42
Larsen & Toubro			5.54		4.35
McDowell			5.44		4.27
UB			4.90		3.85
SSI			4.75		3.73
TVS Electronics			4.28		3.36
Pentamedia			4.24		3.33
Tata Tea			3.83		3.01
Lupin Labs			3.65		2.87
Dr. Reddy's			3.45		2.71
Leading Edge			3.37		2.65
Onward Technologies			3.29		2.58
ACC			3.23		2.54
Torrent Pharma			2.74		2.15
Hero Honda			2.56		2.01
Grasim			2.51		1.97

Source: Value Research

Mutual Funds

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