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February 22, 2000
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Fund Pick: UTI Primary Equity Fund
Background
UTI Primary Equity Fund, an open-ended equity fund, was launched in April 1995. It was to invest at least fifty percent of its corpus in primary issues. It mobilised Rs 175 crore during its initial offer. It has an entry load of 5 per cent but there is no exit load.
Performance
Since its launch, the fund has given an annualised return of 19 per cent against a 12.28 per cent rise in the Sensex. Launched just before the market went into long phase of sustained decline, the Primary Equity Fund remained a below average performer in its existence till 1998. The fund continued with its stated investment objective only for around a year and a half and then sought a change in its investment focus because the booming primary market then disappeared.
Consequently, the fund was unable to find deployment avenues. Given its IPO orientation, the fund also built a portfolio of illiquid stocks which fell more than the market. The fund underwent a consolidation in the last lag of the bear phase. The fund gained momentum only in calendar 1999 and made a significant gain of 121 per cent. The fund in the past three months and one year ending January 31, 2000, gained 31.75 per cent and 97 per cent respectively.
Currently, the fund has sharply focused on a portfolio of a few quality growth stocks. As on September 30, 1999, the top 30 holdings constituted 75 per cent of the net assets while the top ten stocks accounted for 45 per cent. The Primary Equity Fund is evenly spread across sectors and the infotech sector has the largest exposure at 22 per cent of the portfolio. Pharma, FMCG, automobiles and auto ancillaries and banking and finance are the other prominent sectors in the portfolio.
Outlook
The fund is attractive for its focus and small size. However, the load structure of the fund is uncompetitive.
| Fund Basics |
|
|
|
|
|
|
Objective |
Size |
NAV:18/02/2000 |
Exit Pr |
Entry Pr |
Total Ret |
|
Growth |
190.74cr |
22.44 |
22.44 |
23.56 |
19.00% |
|
Benchmark Comparisons (%) |
|
|
|
|
31/1/2000 |
|
|
1M |
3M |
6M |
1Yr |
3Yr |
|
Fund |
2.9 |
31.7 |
50.1 |
96.9 |
25.9 |
|
Sensex |
4.0 |
17.1 |
14.6 |
57.0 |
15.5 |
|
Nat. Index |
9.6 |
38.8 |
44.6 |
98.1 |
24.7 |
|
Obj. Avg. |
6.7 |
42.1 |
62.2 |
116.0 |
35.5 |
|
Top Holdings (30/9/99) |
|
|
|
|
Net Asset (%) |
|
N I I T |
|
|
|
|
9.84 |
|
Hindustan Lever |
|
|
|
|
8.67 |
|
I T C |
|
|
|
|
4.66 |
|
Visualsoft ( I) |
|
|
|
|
4.38 |
|
Satyam Computer Services |
|
|
|
|
3.52 |
|
Reliance Industries |
|
|
|
|
3.24 |
|
Escorts |
|
|
|
|
3.14 |
|
Torrent Pharmaceuticals |
|
|
|
|
2.96 |
|
Dr. Reddy's Laboratories |
|
|
|
|
2.88 |
|
Nestle India |
|
|
|
|
2.39 |
|
H D F C Bank |
|
|
|
|
2.24 |
|
Dabur India |
|
|
|
|
2.21 |
|
Hero Honda Motors |
|
|
|
|
2.18 |
|
Infosys Technologies |
|
|
|
|
2.14 |
|
HDFC |
|
|
|
|
2.11 |
|
Ranbaxy Laboratories |
|
|
|
|
1.84 |
|
B F L Software |
|
|
|
|
1.5 |
|
Rolta India |
|
|
|
|
1.29 |
|
B S E S |
|
|
|
|
1.26 |
|
Amara Raja Batteries |
|
|
|
|
1.25 |
Source: Value Research
Mutual Funds
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