The fund is in the middle of a makeover. In April 2007, three other UTI funds, were merged with UTI Mid Cap. Taking the assets under management to Rs 400 crore from about Rs 74 crore. Along with more money the fund also got a new fund manager. But not just any fund manager, the man who has been handed over the reins is none other than Anoop Bhaskar; the famed manager of Sundaram BNP Paribas Select Midcap. Over a tenure of five years, Anoop Bhaskar produced one of the most successful diversified equity funds of India.
The new fund manager has a challenging task of returning lost glory to UTI Mid Cap, which in 2005 was the 15th best performing fund only to plummet to the 137th position (out of 145 funds) in 2006.
The new management has undertaken its task on a war footing. From an earlier average of about 28 stocks held by the fund, the count shot up to 62 by the end of June. The allocation to small cap companies has been reduced, from an earlier high of 50 odd per cent, this has come down to 38 per cent. The concentration of individual holdings as well as size of sector bets has been further rationalised. Earlier it was not uncommon to find more than a quarter of the fund's assets dedicated to a particular sector, this in turn translated to much higher volatility in returns. Investors can also expect some contrarian moves, a case in point is the exposure to the auto sector as well as the healthcare sector.
Within a short span of three months the fund's returns look more tamed and in line with the category returns. There are definitely more exciting times ahead for investors of this fund and they can expect a re-rating of UTI Mid Cap in the near the future.
This article was originally published on August 20, 2007.
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