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Shanthi Venkataraman

INVESTORS can book profits on UTI Master Value Fund. The fund's performance over the past year has not been impressive vis-à-vis its benchmark as well as its peers. It has underperformed its benchmark, CNX Midcap 200, by about 7 percentage points, mainly due to a much lower appreciation during the 2003 rally.

During this period, it also substantially underperformed peers such as Franklin India Prima Fund. This could be on account of the fund's portfolio composition, which does feature a few large-cap stocks. For those who seek to enhance their exposures to mid-cap stocks to perk up returns of their overall portfolio, Franklin Prima Fund, which is fully focussed on mid-caps, may be a better choice.

Suitability: UTI Master Value has a focus on mid-cap and small-cap stocks; but features a few large cap stocks as well. The substantial allocation to mid-caps enhances the risks associated with the fund, as compared to funds with a large-cap focus. The fund also has as many as 65 stocks in its portfolio. The ability to make correct calls on a large portfolio of stocks may be a difficult task.

However, one positive aspect of the fund is that it has regularly cashed in on portfolio gains through dividend payouts. Because of the dividend policy, investors have the advantage of deploying the receipts appropriately.

Portfolio composition: The fund is fairly diversified with investments in each stock not exceeding more than 5 per cent on an average. The top three sectors account for about 40 per cent of the total assets.

Although the fund has a predominantly mid-cap focus, large-cap stocks such as SBI, Satyam and Tata Power figure in its top ten holdings. The portfolio turnover at about 15 per cent may be on the lower side, as a mid-cap fund normally demands an aggressive churning of the portfolio.

Fund facts: UTI Master Value Fund was launched as a close-ended fund in 1998. It turned into an open-ended fund in 2003. The fund has an asset base about Rs 270 crore. The minimum investment amount is Rs 5,000.

The entry load is 2 per cent; there is no exit load for investments made after September 2003. For investments prior to that date, there is an exit load of 2 per cent. The fund manager is Mr Vinay Kulkarni.

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