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Canganga, an open-end balanced scheme was launched in February 1995 seeking returns from investments

Canganga, an open-end balanced scheme was launched in February 1995 seeking returns from investments in equities in the range of 60-80% and the balance in debt instruments. Entry into the fund is at a 1.5% load and the fund charges a 0.5% exit load for redemptions within 1 year. The fund paid its only dividend of 10% in August 2000.

Canganga has given an annualised return of an atrocious 0.25% during its five & half year tenure. Launched at moderate levels of the market, the fund till 1999 had around 50% allocation to equity, which during the rising markets of 1999 was increased to an average 60-65%. During the large part of bearish phase that the fund has been a witness to, the fund had a higher allocation to mid cap stocks. The fund consistently for over 4 years since its launch remained below par values until the rising markets of 1999 breathed some life into the fund. The fund has throughout not only lagged its peers by featuring amongst the lowest in the order of funds but also lagged the broad markets.

The restructuring initiated saw the fund realign its portfolio in favour of the much sought after sectors of software, pharma and FMCG in the beginning of 1999. However, one year hence, with rising valuations of the ICE sector, the fund came to have around 40% allocation to infotech. While, the bias helped the fund clock a 50% return during the calendar 1999 and scale a high NAV of Rs 15.13 in February 2000, the ICE meltdown saw the fund lose heavily. Year-to-date the fund is down 22%.

Currently, post meltdown the fund has sought a marginally higher preference towards diversification largely spread across Infotech (32%), Pharma (15%), FMCG (8.6%) and Media 94%). The fund also has a 12% allocation to Government of India securities.

Despite the quality portfolio, the fund has a track record of losing much more than its benchmark during the downturns and gaining far less in the rising phases. Investors would do well to invest in other schemes of the same risk category with better track record, services and transparency.