The Hindu Business Line : UTI Dynamic Equity

UTI Dynamic Equity Fund continues to retain its bias for mid and small-cap stocks with 62 per cent invested in stocks with a market capitalisation of less than Rs 2,000 crore as of February 2006. The portfolio turnover ratio at 121 per cent indicates the high churns made by the fund. We take a look at the reshuffle made during the period December 2005 to February 2006.

UTI Dynamic Equity held about 30 stocks on an average over the above period. Exposure to top five stocks rose from 24 per cent to close to 30 per cent. Gammon India replaced Sintex Industries as the stock with maximum allocation. Infrastructure boom seen in the country may have prompted the fund to take a favourable position on construction stocks. Stocks from the sector constituted 17 per cent of the total assets. While Gammon India and IVRCL Infrastructures and Projects were accumulated, the fund took fresh exposure to Era Constructions.

Churn: The consumer goods space saw some pruning. While stocks in Sintex Industries were partially sold, the fund completely exited from Tube Investments. In the auto and auto parts segment, Shanti Gears and Omax Autos took the exit route while Force Motors made an entry.

The fund appeared to view cement sector with caution. After exiting Shree Cement, Mangalam Cement was the only cement stock in the portfolio. Although retail sector stocks have evinced buying interest, the fund's pessimism over the segment was reflected in the exit of Shoppers Stop.

Software stocks were back in fashion as the fund's exposure to IT stocks rose from 7.4 per cent in November 2005 to 12.5 per cent in February 2006. HCL Technologies entered the portfolio with a weight of 5.3 per cent. NIIT and Polaris Software were sold while holdings in Allsec Technologies was increased.

: As a defensive strategy, UTI Dynamic Equity may choose to switch 100 per cent of its assets to cash and cash equivalents if it perceives a significant downside risk in the markets. Total assets, as of February, was Rs 177 crore. In November 2005, Mr Chandraprakash Padiyar replaced Mr Sanjay Sinha as the fund manager.<137>

Vidya Bala

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