With the stock markets witnessing a broad-based rally, funds, which focus on a particular theme or sector, are also looking at tapping into a wider collection of stocks. The first fund to widen its investment objective this year was Prudential ICICI Power. This theme fund initially focussed on the core areas of the economy and this included sectors such as energy, construction, cement and engineering. Power also included software and banks in its definition of core sectors. The only sectors it did not invest in were FMCG and pharmaceuticals. But this restriction was done away in July, when it widened its investment objective to include, among others, consumer-durables and non-durables along with pharmaceutical and healthcare services. Prudential ICICI Power was performing well and in 2002 and figured in the first quartile of its category.
Another prominent change has been in Birla IT Fund. India's best performing technology fund changed its investment objective in August this year. The fund is now 'Birla India Opportunities Fund' and looks at more than just IT stocks. The fund's investment objective now includes all sectors, which can benefit from India's potential as an outsourcing hub. This includes BPO as well as pharmaceuticals and many engineering sectors where the pool of trained scientific and engineering manpower can provide services to a global market. Launched in December 1999, Birla IT has been the topper among the technology funds in the last two years. In 2003 too, the fund had continued its top-notch performance.
Another tech fund is also set to dilute its distinct flavour. Sun F&C Technology will emerge as a diversified equity fund after the merger of the AMC's schemes with those of Principal Mutual Fund. Unlike Birla IT, this fund was not having a good time. The fund ended 2002 at the bottom of the barrel and this feat has been repeated on a year to date basis as well.
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