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Sunday, Oct 26, 2008
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Mutual Funds Investment World - Mutual Funds Markets - Recommendation 
Suresh Parthasarathy Investors in UTI Mastershare can retain their units in the fund, which has marginally under-performed the benchmark BSE-100 over three- and five-year periods. However, it has improved its performance against the category average over the past three years. The fund has demonstrated its ability to outpace the category average during mid- and small-cap rallies, even with moderate exposure to this market-cap segment. The fund sports a moderate risk-return profile with relatively less volatility. It has a large-cap bias, but with 20-30 per cent exposure to stocks with a market capitalisation of less than Rs 7,500 crore. The fund has been consistent in declaring dividends since inception, irrespective of market conditions. The moderate performance with consistent dividends makes it suitable for investors with a limited risk appetite who prefer to book some profits periodically. The top 15 stocks have the potential to deliver good returns when the market sees a revival after this tough period. A hold strategy, however, appears appropriate at present, given the fund’s mediocre performance compared to peers over a long-term period. Performance: The fund has contained losses better than the category average over a one-year and particularly on a year-to-date basis. Having completely under-performed the benchmark in 2006, the fund substantially improved its performance over the next 24 months. During this time-frame it has declined less than the benchmark more than 80 per cent of the time. However during the market rallies, its performance against the BSE-100 has been mixed. Good diversification within the sector has lent support during this volatile period. Portfolio overview: The fund had a well-diversified portfolio of 49 stocks according to its latest available fact-sheet. The concentrated exposure to the top three sectors accounted for close to 50 per cent of the assets. The fund got its exit call right in some stocks such as DLF and ICICI Bank, where it pruned exposures before a major correction. Over the past six months the fund enhanced exposure to Infosys, HDFC, TCS and State Bank of India. In 2008, the fund’s assets have reduced by 26 per cent and NAV by 46 per cent. Close to 17 per cent of the assets were invested in debt and money markets instruments to stay away from the volatility of the current market.The fund was launched in 1986.It is managed by Ms Swati Kulkarni. More Stories on : Mutual Funds | Mutual Funds | Recommendation
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