The Hindu Business Line : UTI Mid-Cap Fund: Firming up on cement

Mid- and small-cap stocks generally follow different patterns in the market. If the market is in a bull-phase mid-caps catch up with large-cap peers with a lag. But when the market turns the other way, the mid- and small-cap stocks are the first to bear the burnt.

Here is a look at how the UTI Mid Cap Fund handles the on-going correction and how it shuffled its portfolio over the six-month period ended March. Assets under management has slipped by 27 per cent, while the NAV corrected by 19 per cent, reflecting the outflows during the market correction.

In the last few months the fund stepped up the cash position on the back of the highly volatile market. It changed its earlier strategy and diluted its concentrated holdings. The latest portfolio has well spread out sectors, the top three accounting for 19 per cent of the assets. The portfolio has 61 stocks, the top 10 cornering 34 per cent.

With reduced asset size and increased cash position the fund pruned several sectors such as auto ancillaries, banks, pharma, steel and chemicals. Instead, it stepped up the asset allocation marginally to sectors such as cement, engineering, electrical equipment and media and entertainment. In auto ancillaries, the fund sold more than 50 per cent of its holdings in Amtek Auto while exposure in small-cap stock Subros was reduced marginally. In the auto space, the lone stock Force Motors was held on to without much change. The fund was underweight on the top performing banking sector through last year.

None of the frontline stocks figured in the portfolio. Holdings in Andhra Bank and Union Bank of India reduced while Karur Vysya Bank was retained without change. Exposure to capital goods stocks was enhanced marginally. UB Engineering was added afresh while Supreme Infrastructure and Texmaco was accumulated. The fund went light on large-caps such as BHEL, Crompton Greaves and Thermax.

The fund preferred to step up exposure to cement manufactures from south. Holdings in India Cements was enhanced, Rain Commodities, a new entrant, cornered 4 per cent.

Textile stocks Aditya Birla Nuvo, Bombay Rayon Fashion, Century Textiles and Industries, Hanung Toys and Pantaloon Retail were all pruned.

The other stocks added were Balasore Alloys, recently listed Core Cable Industries, LT Overseas, Mercator Lines and MP Power Line.

SURESH PARTHASARATHY

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