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Investors with a moderate risk appetite looking for a large-cap option could consider buying units of UTI Opportunities. The fund also suits investors who seek downside protection in a volatile market, along with realistic participation during rallies.
Across time frames, the fund has beaten its benchmark – BSE 100, by more than 5 percentage points. Moreover, it has constantly beaten its category average over one, three and five-year periods. UTI Opportunities limited the downside during market corrections of 2008 and 2011. In the bull markets of 2007, 2009 and 2014, the fund has clocked returns higher than the benchmark. Investors can take the systematic investment route to ride out volatility in the markets and also average costs. The scheme can be part of the core portion of investors’ portfolio.
Sector choicesThe fund invests over 80-85 per cent of its portfolio in large-cap stocks while around 15 per cent is generally parked in mid-caps.
The fund’s top three sectors have been financial services, automobile and IT, totalling to almost 60 per cent of the portfolio. This gives it a mixture of growth and defensive bets. Interestingly, the top five individual stocks account for only 30 per cent of the portfolio. The fund booked profits in segments such as consumer non-durables and trimmed allocation. However, banks and software remain key holdings in the portfolio. It has exited gas, power and ferrous metal sectors. On the other hand, the fund added non-ferrous metal and construction sectors to the basket. Pharma and cement are also part of the top sector choices.
Stock choicesThe stocks are chosen mainly from the BSE 100 basket. UTI Opportunities has a basket of 40-50 stocks with allocations in individual stocks generally restricted to less than 5 per cent, barring one or two cases.
It has trimmed its exposure in its once preferred stocks such as ITC and Tata Motors as well as Petronet LNG, GAIL and HDFC.
It has included Mahindra & Mahindra Financial Services in its portfolio.
Other than this, the fund has not made any major addition or deletion in recent times, though weightage to individual stocks has been varied a bit.
It has upped its stake in HDFC Bank and reduced exposure in ICICI Bank marginally. Infosys, Axis Bank and Maruti Suzuki India are among the top five company holdings.
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