The Hindu Business Line : UTI Master Value: Hold

The recommendation was given in light of relatively poor performance in 2003 and early 2004. Since then, the fund has recovered. In addition, its long-term performance is also impressive.

Fresh investments, though, can be avoided now.

The fund manager of UTI Master Value for the past few years, Mr Vinay Kulkarni, has now been replaced.

This could have a material impact on Master Value's performance, though the fund house will largely dictate the investment strategy. It would thus be prudent to observe the performance over the next 12 months before enhancing exposures.

UTI Master Value is a value-focussed fund. It has no specific mandate to invest in mid-cap or small-cap stocks. Between 2001 and 2004, the fund's net asset values have fluctuated closely in line with that of the erstwhile CNX Midcap 200 index. Since 2004, because of sharp improvement in valuation of mid-cap and small-cap stocks, there was more value to be found in large-cap stocks.

This has resulted in a large-cap bias in the fund's stock selection. The NAV movement would thus be less relatable to that of mid-cap indices, going forward.

The constant change in proportion of large-cap stocks renders it difficult to evaluate the fund's performance relative to a particular index or mid-cap stocks.

UTI Master Value, however, can be considered as an alternative to schemes such as Templeton India Growth, Birla Dividend Yield Plus and Tata Equity P/E fund. Over a longer period, UTI Master Value's performance needs to be comparable to these funds.

Performance: The fund has registered returns of nearly 57 per cent in the past year. This is in line with performance recorded by funds such as Templeton India Growth and Tata Equity P/E.

Over a three-year period, growth in the NAV is almost identical to that of Templeton India Growth.

Portfolio: UTI Master Value is a medium size fund with net assets of about Rs 500 crore under management. The sector allocation is diversified with only the exposure to the auto sector topping the 10 per cent mark.

In terms of stocks, however, investments are concentrated, with the top 10 accounting for nearly 44 per cent of assets.

Investments in large-cap stocks, taken as stocks in the BSE-100 index, form about 32 per cent of net assets. This is significantly lower than the proportion invested in large-cap stocks by Templeton India Growth.

Investments in large-cap stocks are however higher than in the past and may even go up if mid-cap and small-cap stocks sustain their premium valuations.

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