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Pioneer ITI Pharma Fund

Given the promising outlook of the sector and a selectively concentrated portfolio, Pioneer ITI Pharma Fund should substantially gain in future.

Pioneer ITI Pharma Fund primarily invests in stocks of the companies in the pharmaceuticals and life sciences sector. Launched in March 1999, the fund's asset base surged quickly from Rs 25 crore in April 1999 to Rs 51 crore in November 1999.

The fund's best performance came through only in the second quarter of 1999 - a sharp 66 per cent gain during July and October. However, in absolute terms the fund has been a disappointment so far, with an 8 per cent decline since launch. Also, the fund has barely managed to match its performance to the benchmark BSE Healthcare Index. The overall dismal performance comes on account of fund maintaining an average 10 per cent cash position. But apart from the bouts of inflows and outflows, there has been a marginal rise in the new investors joining the fund.

The fund claims a focus on quality management, a sustainable product profile, and R&D base and has packed up the portfolio with quality stocks from the domestic as well as foreign brands. Till the end of December 1999 portfolio was dominated with foreign pharma stocks, for the eased out government norms working in their favour. But since 2000, with the domestic pharma stocks outperforming their foreign counterparts, their share in the portfolio has been on rise. The fund portfolio has been consistently top heavy-with top 5 positions of the fund have accounted for nearly 50 per cent of total portfolio. These include Hoechst Marion Roussel, Dr. Reddy's, Cipla, Ranbaxy and Pfizer.

With a selectively concentrated portfolio, Pioneer ITI Pharma Fund should substantially benefit from the bright outlook for the sector and underlying stocks.