Diversified by objective but heavily into technology stocks. That's ING Growth Portfolio for you, whose penchant for technology stocks has seen it lose a whopping 66% for the one-year ended June 30, 2001. Worse, the slide is sharper than an average technology fund, which has lost 58% in the same period.
Launched in May 1999, ING Growth Portfolio was structured as an aggressive equity fund with concentrated holding within reasonable risk limits, rather than an unproductive and excessive diversification. Thus, the fund has allocated an average 55% of its assets to top three stocks.
The fund took off on a diversified note with a one-third allocation to the tech sector but the exposure galloped to over 70% by December 1999. Riding the bull-run, the fund's NAV peaked in early 2000 at Rs. 39. However, with the burst of the tech bubble, the fund plummeted and went below par early this year. The sharp losses notwithstanding, ING Growth Portfolio continues to be bullish on ICE stocks - the weightage has only gone up despite a falling corpus. Apart from fresh investments, the fund has been cutting exposure to other sectors in favour of technology with the average holding at 91% in 2001.
With all risk and no returns, ING Growth Portfolio today is a pseudo-technology fund and has strayed from its diversified mandate. The standard deviation of the fund's returns at 10.35% is higher than the tech category average of 8.27%, making it more volatile than pure technology plays! In its current form, the fund is a strict no for investors looking at a diversified option. On the other hand, for those planning to invest in a technology scheme, there is no dearth of dedicated funds.