Search the Internet           Tips

UTI Services Sector Fund

UTI Services Sector is a sectoral fund launched as part of the UTI growth sector series in 1999. Entry into the fund is at net asset value while exit is at a load of 2 per cent. The fund has declared its second dividend of 20 per cent with book closure from January 20-28, 2001. At the current net asset value of Rs 28.1, the yield works out to 7.12 per cent. The fund seeks investments in the fast growing services sector, which includes the banking and finance sector, utility service providers, transportation and technology companies.

UTI Services Sector scouts for companies, which offer a quality management along with high growth rates. The fund started off on a diversified note, building a blue-chip portfolio across technology, financial services and health care stocks. However, with the technology stocks catching the markets fancy in the early part of 2000, the fund took a predominant stance on the technology counters, which averaged around 65 per cent of the portfolio in the last calendar. Financial services and service sector stocks have been other favorites. Infosys, NIIT, Zee, ICICI, and Apollo Hospitals have been the regular holdings of the fund.

With technology-heavy funds on top in early 2000, the fund logged a whopping 371 per cent gain at the peak of the rally. However, as the rally petered, the fund shed a good part of its value. Nonetheless, an aggressive churning of its holdings helped the fund stem the slide and emerge as the top gainer in the equity category for calendar 2000.

The small size of around Rs 590-600 million has backed the fund in its active strategy with a portfolio turnover of 1110 per cent in June 2000 suggesting a holding period of less than a month. The exposure in economy stocks has also helped the fund guard its assets in a falling market. The fund manager believes that the timing of the launch has also worked in the fund's favour, helping it pick up new economy stocks at attractive valuations. Going further, the fund would continue to scout for long-term performers while booking profits when opportunity arises.

In its one and half year tenure, which has coincided with one of the sharpest swings in the market, UTI Services Sector has posted an impressive return of 102.67 per cent. However, the future success of the fund hinges on the manager's ability to continue to lap up market opportunities, and sustain the performance even with a spurt in corpus.

Fund Basics
Objective	Size (Cr)	NAV: 9/11/2000	Exit Price	Entry Price	Total Return (%)
Growth	59.88	28.00	27.44	28.00	101.96%
Benchmark Comparisons (%)					5/1/2001
	1M	3M	6M	1Yr	3Yr
Fund	7.31	9.14	-17.49	36.55	—
Nifty	3.32	3.32	-12.88	-15.95	8.17
Sensex	2.74	1.63	-14.84	-21.91	3.81
Value Research Sect Avg	2.04	4.64	-9.21	-7.25	30.36
Top Holdings (30/11/2000)					% of Assets
NIIT					12.34
Infosys					10.70
Himachal					10.01
BPL					7.56
Global Tele					7.43
Apollo Hospital					7.31
Satyam Computer					6.91
Zee Telefilms					6.67
SSI					6.27
ICICI Bank					5.63
ICICI					5.14
VSNL					4.52
EIH					2.56
Pentamedia Graphics					1.89
Rolta					1.80

Source: Value Research

Money

Fund File

Tell us what you think of this report