VR Logo

Regaining Old Stature

UTI Equity is part of the elite senior citizens club with a history of around 18 years…

Launched in May 1992 as UTI Mastergain-92, it was a closed-end scheme. By collecting Rs 4,472 crore during its launch, it holds the record for mobilising the third highest collection by any equity fund ever during its NFO period. It was converted into an open-ended scheme in January 1997 and was rechristened in July 2005.

Its great performance in 1993 was soon history. Later, between 2002 and 2004, it had a good run only to lag behind its peers in the following three years.
When Bhaskar took over the fund in April 2007, he began by broad basing the portfolio. The number of stocks increased to 63 by December 2007 from 36 (May 2007) and now stands at 70+. As a result, the concentration of the top five holdings has also decreased.

FMCG has always been a favourite sector and has featured amongst the top three almost every month since 2000. According to Bhaskar, “Though exposure to this sector has continued to remain high and overweight compared to the benchmark exposure, the portfolio has tempered its exposure as compared to the period immediately after March 2009. The current market scenario combined with the defensive nature of this sector has prompted us to maintain an overweight as compared to the benchmark.”

The exposure to FMCG in 2008 along with the high cash and debt exposure helped the fund shield its investors better than its peers in 2008. Although it missed out the initial part of the rally that started in March 2009 due to high cash exposure (29% in March 2009), the fund was able to cover up its tracks and put in some good numbers in the second half of 2009. Smart moves were the allocation to Auto and increased exposure to Technology.

In 2010, the fund once again delivered higher than its category average and this year it has lost less than the average. “Active sector allocation with a focus on domestic consumption rather than investment-led infrastructure sectors, led to the fund recovering and sustaining its performance in 2010,” says Bhaskar. Exposure to FMCG has moved up to 13 per cent (July 2011) as the fund re-entered HUL and increased exposure to ITC.

Exposure to mid caps is generally to the bigger players. The smallest company with an allocation of over 1 per cent in the fund’s portfolio has a market capitalisation of around Rs 3,000 crore. The allocation to small caps has hardly exceeded 10 per cent ever.