The Hindu Business Line : UTI-GSF Services Sector Fund

In the turbulent market conditions of the past year, some of the prominent diversified funds failed to beat their benchmarks. However, theme-based funds of this nature fared relatively well, generating double-digit returns. Here is a look at how the UTI-GSF Services Sector Fund shuffled its portfolio holdings during the quarter ended March 2007.

The funds' objective is to invest in companies engaged in service businesses, such as banking, finance, insurance, telecom, travel and media and entertainment. UTI-GSF Services appears to be bullish on IT, banking and construction, with these sectors accounting for over 50 per cent of the assets.

The fund's key sector choice during the quarter was IT services, in which it stepped up exposure to frontline stocks such as Infosys, TCS, Satyam Computer and Wipro. It pruned Infotech Enterprises, while mid-cap stock KPIT Cummins moved out of the portfolio.

With an improved allocation to banking sector, the holdings in ICICI Bank and State Bank of India increased significantly. UTI Bank and Indian Overseas Bank were added, while Punjab National Bank was reduced. Housing Development Finance Corporation was the lone stock in the finance space and the fund marginally trimmed its exposure.

With interest rates rising steadily, the fund appears to have rejigged its construction exposures. Patel Engineering, D.S.Kulkarni and Parsvnath Developers were the stocks that exited the portfolio. Instead the fund accumulated shares of Sobha Developers, IVRCL Infrastructure, Ansal Properties and Infrastructure and Nagarjuna Construction.

With telecom space buzzing the fund stepped up allocations to the sector. Holdings in Bharti Airtel increased and Reliance Communication was added. Instead, it pruned exposure to VSNL.

With a fresh inflow into the fund, exposure to Aditya Birla Nuvo increased by 30 per cent while Pantaloon Retail and Celebrity Fashions were retained without change. The fund appears to be bullish on EIH, its holdings almost doubling over this quarter. Exposure to Indian Hotels went up marginally. The fund pruned the exposure to media and entertainment stocks and sold ZEE News and Shrinagar Cinemas.

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