This week a UTI fund gave a pleasant surprise -- UTI Petro Fund, up 17.70 percent. The highest among all equity funds. It also provided a unique window of opportunity to participate in the frenzied growth of oil stocks otherwise unavailable to investors. Unavailable to investors because when the oil stocks went ballistic, the trading in them was frozen for price hitting the circuit breaker. But UTI Petro fund was available with ease through which one could buy this briskly rising stock portfolio.
The rally in oil stocks was triggered by the government divestment in IBP to Indian Oil. The government's reactivated dis-investment process coupled with likely dismantling of administered price mechanism of oil prices, fueled the fire in oil stocks. And UTI Petro Fund was the key beneficiary of the rally in these stocks. After all, the portfolio is fully packed with a dozen of these. The top holdings include – IBP (15.61%), BPCL (13.53%), IPCL (11.48), HPCL (10.81) & Indian Oil (8.75%) together account for 60 per cent of the net assets. UTI Petro Fund was launched in June 1999 and has posted a total return of 25.06 per cent since launch. The fund has outperformed the diversified benchmark BSE Sensex across time period.
If you think, the boom in oil stocks still has some way to go, UTI Petro Fund might be a superior way to benefit. It is attractive for its convenience, low minimum investment and perhaps the only available vehicle to capitalise on the boom in oil stocks with its targeted diversification. But only if you think there is steam left. As the sharp spurt witnessed last week is history and factored in the current NAV.
Fund Update: During the week, the market gained 160 points on the Sensex and 89 points on the broad-based National Index. All equity funds gained during the week. The leading gainers were -- UTI Petro (17.70%), GIC Fortune '94 (11.26), IDBI Principal Tax Savings Fund (8.65%), IDBI Principal Equity (8.53%), Magnum Contra (8.27%) and Pioneer ITI Prima (8.26%).