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Unit Scheme-95

Unit Scheme-95 is an open-end balanced fund from UTI. Entry into the fund is at net asset value, while it has an exit load of 2 per cent. The fund carries a minimum investment of Rs 10,000. The scheme has declared a 15 per cent dividend with the record date on January 22, 2000. At the current net asset value of Rs 141 (Rs 100 face value), this works out to a yield of 10.64 per cent. However, the fund is unattractive for dividend stripping with a four-day book closure.

The fund has given an impressive return of 20.19 per cent since launch. The fund initially went on to acquire a portfolio of large cap cyclical stocks while holding a diversified portfolio. As a percentage of the market value of assets, the diversified equity exposure surged to 76 per cent at the peak of the ICE rally in 2000. However, besides the subsequent market correction, the fund has pruned its equity exposure while still maintaining a pro technology stance.

As on November 2000, equity instruments accounted for 44 per cent of the corpus, while debt and current assets accounted for 50 per cent and 6 per cent, respectively. Within its equity portfolio, technology and diversified stocks accounted for 21.72 per cent and 10.05 per cent of the market value of assets. As UTI discloses the market value of assets, the exact debt, equity break up is not available.

For the debt component, the fund has held on to corporate debentures. By holding on to these instruments, the fund has laid emphasis on coupon income rather than trading profits from gilts. Although the fund does not have investments in gilts, with an average maturity of 4.4 years in November, it seems well positioned to capture the benefits of the current rally.

With a predominant debt exposure, its active management of equity component is not amply reflected in the low turnover ratio of 43.36 per cent. However, the active management of the equity component has worked in its favour with the fund frequently outperforming the Value Research Balanced Fund index since the start of the rally in end of 1998. And this has helped it post an impressive gain of 26.36 per cent in the last calendar against the sectoral loss of 11.48 per cent. With this, US-95 has emerged the top-performing fund in its category in 2000.

US-95 is a conservative balanced fund, yet has an aggressive equity exposure. While the equity debt allocation can be in the band of 40-60 per cent, dividends by the fund could invite a tax payout by the AMC. Hence, to be on safe side and to avoid tax incidence, only the growth plan should be considered.

Fund Basics
Objective	Size (Cr)	NAV: 16/11/2000	Entry Price	Exit Price	Total Return (%)
Balanced	149.14	175.50	175.50	171.99	20.19%
Benchmark Comparisons (%)					5/1/2001
	1M	3M	6M	1Yr	3Yr
Fund	-6.14	-5.96	-7.11	10.05	29.05
VR Balanced	3.26	4.62	-4.50	-3.62	10.30
VR Sector Avg	-0.61	0.06	-9.34	-13.07	19.07
Equity Portfolio (30/11/2000)					% of Assets
Infosys Tech.					12.29
Reliance Ind.					8.06
Bharat Electronics					3.02
Information Tech.					2.96
HLL					1.99
BFL Software					1.55
ITC					1.37
Satyam Computer					1.13
SSI					1.09
Wyeth Lederle					1.04
Essel Packaging					1.01
Pentamedia Graphics					0.94
NIIT					0.91
Nestle India					0.84
Indo Gulf Corp					0.66
Finolex Cables					0.56
Debt Portfolio (30/11/2000)					% of Assets
IDBI					5.86
ICICI					5.19
Reliance Petroleum					4.95
Reliance Industries					3.77

Source: Value Research

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Fund File

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