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FSM In Media: UTI Equity Fund - A Review
June 30, 2015

During a bull market, this fund will not deliver superlative performance vis-à-vis some of the multi cap funds that are taking aggressive bets in the mid cap space. However, the fund will protect the downside whenever the markets become jittery.

Author : Dr. Renu Pothen

 Aggressive investors should go for infrastructure funds

This article was published on on June 24,2015.

UTI Equity Fund has been in existence in the industry since 1992 and has always seemed to be a silent player in the multi cap space. During our analysis to pick the best multi cap funds on our platform, a recurrent trend since the last few years has been that there is always a tie between UTI Opportunities Fund and UTI Equity Fund. While UTI Opportunities Fund was constantly ahead of UTI Equity Fund in most of our research parameters, the latter used to be among the top 10 performers in its category. Interestingly, both funds follow strategies that are quite different from each other, in spite of being managed by Anoop Bhaskar. My endeavor in this column is to give investors a brief review of UTI Equity Fund and suggest if this fund can form part of investor portfolios in the long run.

Investment Strategy

The investment strategy of the fund states that the fund is positioned as a diversified equity fund. The fund manager has the flexibility to invest across market capitalization, large and mid caps. As per the mandate, 65% of the portfolio would be invested in large cap stocks and hence it will be pre-dominantly a large cap fund. The data points go on to prove this fact, as an analysis of the market capitalization trends for the last 36 months (May 2012- April 2015) shows that an average allocation of 85% of the corpus has been in large cap stocks.

A perusal of the portfolio during the same period of analysis shows that the fund follows a buy and hold strategy. This can be seen from the fact that out of 77 stocks held in April 2015, 47 of them have been a part of the portfolio during the entire 36 months of study. As on April 2015, the top 5 stocks in the portfolio are HDFC Bank (6.18%), Infosys (4.84%), ICICI Bank (4.81%), Tata Consultancy Services (4.12%) and Reliance Industries (3.67%). It is interesting to note here that these 5 stocks have been the top 5 holdings of the fund since April 2014.

As far as the sectoral allocation is concerned, the fund manager's favorite sector has been the banking space with the average allocation into the same standing at 20% during the 36 months of analysis. A detailed analysis of the data points show that since April 2013, the top 5 sectors of this fund has remained the same with an average of 57.83% of the corpus being concentrated into these sectors. The top 5 sectors consists of Banks, IT – Software, Automobile, Pharmaceuticals and Refineries.


If an investor had put INR 10,000 into this fund and its benchmark (S&P BSE 100) on May 2, 2012, the corpus would have been INR 18,277 and 15,825 respectively on April 30,2015.

The fund had also been able to outperform its benchmark during the different calendar years as can be seen from the graph given below.

My Take

A multi cap fund with a bias towards the large cap space is an ideal choice for conservative investors. The buy and hold strategy being followed by Bhaskar and team means that this fund will be less volatile vis-à-vis other multi cap funds. Hence, risk averse investors can park their surplus into this fund for long term. Investors entering the fund should keep in mind that during a bull market, this fund will not deliver superlative performance vis-à-vis some of the multi cap funds that are taking aggressive bets in the mid cap space. However, the fund will protect the downside whenever the markets become jittery.

Disclaimer: iFAST and/or its content and research team’s licensed representatives may own or have positions in the mutual funds of any of the Asset Management Company mentioned or referred to in the article, and may from time to time add or dispose of, or be materially interested in any such. This article is not to be construed as an offer or solicitation for the subscription, purchase or sale of any mutual fund. No investment decision should be taken without first viewing a mutual fund's scheme information document including statement of additional information. Any advice herein is made on a general basis and does not take into account the specific investment objectives of the specific person or group of persons. Investors should seek for professional investment, tax, and legal advice before making an investment or any other decision. Past performance and any forecast is not necessarily indicative of the future or likely performance of the mutual fund. The value of mutual funds and the income from them may fall as well as rise. Opinions expressed herein are subject to change without notice. Please read our disclaimer on the website.Please read our disclaimer in the website.

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