Unit Scheme '95 has posted a solid performance with an annualised return of 16.03 per cent in its six and half years tenure since launch. The fund is dynamically re-balanced in a range of 40-60 per cent allocation in stocks and bonds. This fund's maneuverability to move back and forth within this allocation at right times and a well-diversified stock portfolio has paid handsomely.
In its initial years, Unit Scheme 95 treaded cautiously with a maximum equity allocation of 15 per cent. Despite its conservative stance, it was unable to escape the sustained downturn in equities. The fund posted average returns till 1998. With market turnaround in 1999, the fund went ballistic posting a 65 percent return against 41 per cent of the Value Research's Balanced Index. In a limited way, Unit Scheme 95 participated in technology stocks unlike other funds of the Unit Trust. The fund's key technology positions were the top tier companies and a marginal position in mid-cap stocks. Its equity strategy has paid rich dividend in the southward market in the past years. In calendar year 2000, the fund allocated an average 21 percent in technology stocks and held ground with a 26 percent gain during the year. This was against the 11.5 per cent fall registered by the average balanced fund.
In a tough equity market through 2001, the fund has taken has gradually taken a defensive stand with a high fixed income allocation. The debt positions look high quality, however the credit and maturity profile is not available on account of inadequate disclosure. As on 30 June 2001, the debt equity allocation was at 65:35, with the equity basket carrying technology, diversified and FMCG stocks as its top picks.
Unlike most other funds of Unit Trust of India, Unit Scheme 95 has been very actively managed on the dimensions of re-alignment of the asset allocation and the underlying securities. And it shows in its above-average long-term performance. Further the fund has successfully been able to deliver in line with its objectives - average returns in lean times and handsome returns in buoyant markets.
Looking beyond concerns about UTI, Unit Scheme 95 proves' to be an attractive balanced fund, well poised to deliver steady returns with capital appreciation.