UTI-Growth Sectors Fund- Petro Fund has changed its mandate to also include sectors and companies beyond petrochemicals, oil, gas and refining. According to the fund's new brief, it will start looking at companies engaged in manufacturing of downstream oil products, power generation companies, ethanol companies, and engineering and capital goods companies. The fund scheme will also look at consultancies related to these businesses and companies financing and servicing these sectors.
The move will broaden the investment universe of the fund. Till now, it had been constrained by a very narrow mandate to invest only in oil and gas sector, which has been a laggard in the recent years. As a result, the fund has substantially underperformed the broader markets. For instance, it returned only 12.24 per cent in 2006 while the Sensex was much ahead with returns of 46.7 per cent. However, the fund had its good old days in 2002 and 2003 when it delivered spectacular returns of 123 per cent and 72 per cent, respectively, far ahead of the Sensex and Nifty. With the addition of other sectors, the fund's performance may improve.
The fund is large-cap oriented and its assets have not fluctuated much over the last two years. Reliance Industries (RIL), the top holding, accounts for over 32 per cent of its portfolio and its exposure has been gradually increasing since January 2007.
UTI Petro was India's only petro fund after its peer - JM Basic - changed its objective to become a more diversified offering. To reflect the change in objective, the fund will be rechristened as UTI-Growth Sectors Fund-Energy Fund.
Investors can redeem their investments without paying any exit load till October 5, 2007, after which the changes will come into effect.
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