At its core, Pioneer ITI Internet Opportunities Fund is a technology fund, but with a difference. Its investment ambit goes beyond technology solution companies and dotcoms to include any company that will benefit from Internet. The funds stated objective is "...to capitalise on investment opportunities created by the dramatic growth of Internet and its profound impact on individuals and businesses". Launched in February 2001 at the peak of the tech frenzy, investors coolly parked Rs 500 crore in the fund.
The fund has only slipped down since its launch with over 50 per cent capital erosion. Despite the erosion, the fund is relatively better off than most other technology funds. Infact, it is the best performing technology fund over the past 1-year with a 39% decline and 25% fall on year-to-date basis in 2001. The fund owes its relatively superior performance in a freely falling tech valuations, for its consistently high cash allocation, its quality orientation, its non-tech exposure and selective participation in overseas listing of Indian ADS -- Rediff.com, Wipro and HDFC Bank.
Today, technology stocks remains the top position of the fund and account for 49 per cent of the fund, followed by tech savvy financial companies account for 20 per cent of the portfolio, 15 percent in Diversified, Energy and Services companies. The remaining 16 percent of funds are in cash. The tech position of the fund is largely in large-cap stocks with Infosys, acconting for almost 16% of the fund. The financial stocks include HDFC, HDFC Bank, ICICI and ICICI Bank. The fund also has a number of unlisted positions -- India Infoline, Chennaionline, Planetasia, Numero Uno, Quantum Info, Shoppers Stop, and Indya.com which together account for 1.41 per cent of the total portfolio.
Pioneer ITI Internet Opportunities Fund is a quality tech heavy portfolio. The fund will remain volatile to an extent. The fund does not deserve being the core of an equity portfolio. The fund well serves the need of long-term investors seeking conservative participation in a technology portfolio.