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With its poor disclosure UTI G sec does not offer itself to clear analysis. However, performance numbers suggest that lack of proactive management, has seen the fund settle in the bottom quartile

UTI G Sec invests only in Government Securities. Despite being new, the fund has emerged as the largest gilt fund with an asset base of Rs 443 crore.

UTI G Sec seeks to invest in exclusively in central and state government securities. With a narrow focus on Government Securities or Gilts, UTI G Sec is like a sectoral fund among debt funds. Its focus on Gilts ensures minimal credit risk with high liquidity. The liquidity offers room to change strategy with alacrity.

High on credit quality, Government Securities are not free from all risks. They are susceptible to interest rate movements - gaining value in times of a rate cut while shedding gains in times of rate cut. The high liquidity only adds to the sensitivity of the instruments. Funds normally align to the changing interest rate outlook by altering their portfolio maturity.

The fund does not disclose its portfolio maturity. Hence, the funds strategy cannot be reviewed. And based on its 1-year return, UTI G-Sec is below average with 9.9% against category average of 12.09% for 21 funds.

While the portfolio strategy is not clearly discernible, the performance numbers suggest that with lack of proactive management has seen it fall in the bottom quartile.