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UTI Master Index Fund

Dhirendra Kumar

UTI Master Index fund, launched in June 1998 seeks to replicate the BSE-30 Sensitive Index. The fund available at NAV levies a 3 per cent exit load. UTI Master Index Fund passively tracks the BSE Sensex, with a proportionate investment in the 30 stocks as in the index. Thus, only in the event of the index undergoing a change, the set of companies in the fund will change.

FUND BASICS   Objective    Size (Cr)    NAV: 23/05/2001    Exit Price    Entry Price    Total Return   Growth   207.51   10.98   10.65   10.98   3.28%

There have been three changes in the Sensex constituents, since the launch of the fund. First in November 1998, when Arvind Mills, G E Shipping, IPCL and SAIL were eased out for inclusion of Castrol, Infosys Technologies, NIIT and Novartis. The second change was in April 2000, when IDBI, Indian Hotels, Tata Chem and Tata Power were excluded for Dr. Reddy's Laboratories, Reliance Petroleum, Satyam Computer and Zee Telefilms. And in January 2001, Cipla replaced Novartis (India).

Today, the 30-stocks in the Sensex are - ACC, Bajaj Auto, BHEL, BSES, Castrol, Cipla, Colgate, Dr. Reddy's, Glaxo, Grasim, Gujarat Ambuja Cements, Hindalco, Hindustan Lever, Hindustan Petroleum, ICICI, ITC, Infosys, Larsen & Toubro, Mahindra & Mahindra, MTNL, Nestle, NIIT, Ranbaxy Labs, Reliance, Reliance Petroleum, Satyam Computer, State Bank, Tata Engg, Tata Steel and Zee Telefilms.

Benchmark Comparisons (%) (18/05/2001)      1M    3M    6M    1Yr    3Yr   Fund   6.43   -15.61   -6.59   -14.95   -   Sensex   6.29   -15.59   -6.42   -12.82   -2.21   Nifty Tot. Ret.   6.36   -14.93   -4.91   -8.87   2.76   Obj. Avg.   5.45   -19.21   -14.15   -18.81   6.29

On the positives, a Sensex tracker is well-diversified, large capitalisation equity vehicle enjoying highest liquidity in our market. Besides, more frequent changes in the Sensex constituents have reduced the risk of a laggard and an old leader still being part of the Sensex. Since a clearly spelled-out portfolio strategy missing for most of our actively managed funds, UTI Index Fund proves to be the only predictable portfolio you can own. However, an index fund by definition settles for being an average performer. Besides, a likely lower expense for an index fund still does not show in performance.

The Master Index fund has very closely tracked the Sensex. The fund is a good investment for long-term capital appreciation.

Top Holdings (30/04/2001)      Value (Cr)    % of Assets   HLL   36.65   17.66   Reliance Industries   28.66   13.81   Infosys Technologies   19.55   9.42   Reliance Petroleum   19.01   9.16   I T C   16.29   7.85   SBI   8.78   4.23   MTNL   7.51   3.62   Cipla   5.44   2.62   I C I C I   5.17   2.49   Satyam Computer Services   4.81   2.32   Hindalco Industries   4.77   2.30   Ranbaxy Laboratories   4.57   2.20   HPCL   4.50   2.17   Larsen & Toubro   4.34   2.09   Nestle India   4.17   2.01

Source: Value Research

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