IL&FS eCom is open-ended sectoral fund dedicated to the technology sector. Entry is at a load of 2%
17-Oct-2000 •Research Desk
IL&FS eCom is open-ended sectoral fund dedicated to the technology sector. Entry is at a load of 2% while exit is at NAV. However, the scheme charges a load of 2% if redeemed within 7 calendar days. The fund seeks to invest at least 65 % of the corpus in new economy stocks such as technology, media, telecom and Internet companies. Launched at a time when the market was in the grip of ICE frenzy in January, the fund made investments at near peak levels. Sure enough, the fund took off on an impressive note, opening at Rs 14.19 when it went open-end. The fund started off with a concentrated portfolio comprising A and B1 group stocks. Within the technology basket, the fund has retained a predominant exposure to software services at an average of 55% while training stocks take the second place. Telecom, Media and computer peripherals account for marginal holdings in the portfolio. That apart, the fund has a marginal exposure to unlisted stocks. In recent time, the portfolio has been further concentrated with 10 stocks accounting for 78% of the corpus. The top holding of SSI, Satyam Computers, Visual soft and Infosys Technologies together account for 39 % of the corpus. Sectoral funds with their focused investments are more risky than diversified equity funds. Further, with technology stocks leading the meltdown in the markets since April, all the technology funds have been badly hit. IL&FS eCom has since launch shed almost half of its par value while the Nifty Total return has fallen by 23%. With the technology sector holding long-term prospects, the fund could cover up losses in the long-term.