The Hindu Business Line : UTI Mutual schemes sit on current assets

UTI Mutual Fund is sitting on a large pile of current assets, a part of which is ready for deployment. As the latest data released by the fund house indicate, a number of diversified schemes had significant current assets/cash components in their portfolios.

UTI's Master Value, Grandmaster and Index Select schemes topped the list, with current assets ranging between 10.65 per cent and 19.94 per cent as at the end of last month.

The situation, according to Mr A.K. Sridhar, Chief Investment Officer, would in future enable the MF to deploy its cash holdings selectively, depending on the opportunities that may become available in the market.

A portion of these assets was in fact used when it subscribed to the IPOs made recently.

The schemes that carried sizeable current assets included US-95, a balanced scheme with 14.24 per cent of its assets ready for use, and UTI Services Sector Fund, which had 7.98 per cent fit for allocation. Also included in this set were UTI CRTS, a scheme aimed at trusts and societies, and UTI-PEF Unit Scheme. Their current assets stood at 12.75 per cent and 8.37 per cent respectively. For UTI CRTS, the ceiling for equity investments has been fixed at 30 per cent.

It may be mentioned here that UTI Petro Fund had till recently a particularly large cash component, which was pared subsequently. A few oil & gas companies had tapped the market and the fund participated in them aggressively.

A commentary by Mr Sanjay Sinha, Fund Manager, has explained the MF's rationale. "The current assets of the fund, though apparently high, are against our long positions in ONGC futures and also against pending credit of ONGC shares applied in the public offer," he noted.

The stocks in the sector were under pressure chiefly because of the overhang of these public issues, and the MF expected them to rally once the issues were behind it. The petro fund, incidentally, had as on March 31 current assets of 28.19 per cent, while long ONGC April 2004 futures accounted for 8.57 per cent of its portfolio.

The other sector-specific schemes also held cash in various proportions. The Brand Value and the Pharma & Healthcare funds had 4.77 per cent and 6.58 per cent of it respectively, while the Software fund had 4.64 per cent.

On another front, the Mahila Unit Scheme, which can invest up to 30 per cent in equities, carried a relatively larger quantity — 18.4 per cent.