 "Fund Pick: UTI Equity Fund")
Launched in May 1992, UTI Equity Fund has been ranked CRISIL Fund Rank 2 (good performance) in the large cap-oriented equity category in the CRISIL Mutual Fund Ranking for the quarter ended September 2013. The fund was within the top 30 percentile (Fund Rank 1 or Fund Rank 2) for the past four quarters.
Over the past year ended September 2013, the fund’s quarterly average assets under management (AUM) increased by 5.3 per cent to Rs 2,226 crore, whereas the category’s (large cap-oriented equity category as per CRISIL Mutual Fund Ranking for September 2013) declined by 5.4 per cent. The fund is managed by Anoop Bhaskar.
The fund aims to generate capital appreciation by investing in a diversified portfolio of leading stocks in the respective sectors. The aim is to invest across market capitalisation, with large caps comprising around 65 per cent of the portfolio.
Performance
The fund has outperformed its benchmark (S&P BSE 100), the category benchmark (CNX Nifty Index) and the category across various time frames (one, three, five, seven and 10 years). Over the past seven years, the fund has given an annualised return of 10.81 per cent compared to its benchmark’s 6.98 per cent, the category benchmark’s 7.30 per cent and category’s 8.99 per cent.
An investment of Rs 1,000 since inception (May 18, 1992) in the fund would have appreciated to Rs 10,751 as of December 11, 2013 at a compounded annualised growth rate (CAGR) of 11.63 per cent. The same amount invested in the fund’s benchmark and category’s benchmark would have grown to Rs 7,177 at 9.56 per cent (CAGR) and Rs 6,639 at 9.17 per cent, respectively.
A monthly investment of Rs 1,000 over a 10-year period until December 11, 2013 — under a systematic investment plan (SIP) — would have grown to about Rs 2.45 lakh (on an investment of Rs 1.2 lakh) at a CAGR of 13.81 per cent. A similar investment in the S&P BSE 100 and CNX Nifty Index would have grown to Rs 2.10 lakh at a CAGR of 10.89 per cent and Rs 2.11 lakh at a CAGR of 10.94 per cent, respectively.
The fund’s consistent performance is also associated with lower volatility or market risk (measured by standard deviation). The volatility of 17.98 per cent is less compared to the S&P BSE 100 (21.41 per cent), CNX Nifty Index (22.03 per cent) and the category (19.21 per cent) over a three-year period ending December 11, 2013.
The fund has been close to fully invested, with an average 94.89 per cent exposure to equity over the past three years ending November 2013. In terms of market capitalisation, the fund is biased towards large-cap with an average 87 per cent of its equity exposure in CRISIL-defined large-cap stocks (top 100 stocks based on average market capitalisation on the National Stock Exchange) over the past three years.
According to the mandate, the fund maintains a highly diversified portfolio. In the past three years ending November 2013, the fund has an average of 72 stocks in its portfolio compared to the category’s 41. Of 68 stocks in November 2013, the fund consistently held 45 stocks constituting 77 per cent (average exposure) of the total portfolio during the three-year period. The fund has an average 40 per cent exposure towards the top 10 stocks compared to category’s 50 per cent. At a sector level, the fund has 58 per cent exposure to the top five sectors, which is in line with the category’s exposure.
Over three years, the fund has been overweight on sectors like pharmaceuticals and consumer non-durables, and underweight on sectors like industrial capital goods and non-ferrous metals has helped the fund outperform S&P BSE 100 as well as the category. These industries represented by CNX Pharma Index, CNX FMCG Index, S&P BSE Capital Goods and CNX Metal gave 14.02 per cent, 22.79 per cent, -13.28 per cent and -17.51 per cent annualised returns, respectively, compared to 1.19 per cent of S&P BSE 100 and 1.75 per cent of the CNX NIFTY Index over the three-year period ended November 2013. The fund’s superior stock selection, such as Sun Pharma, ITC, TCS, Shree Cements and Eicher Motors, has helped the fund outperform over the same period.
Over the past year ended September 2013, the fund’s quarterly average assets under management (AUM) increased by 5.3 per cent to Rs 2,226 crore, whereas the category’s (large cap-oriented equity category as per CRISIL Mutual Fund Ranking for September 2013) declined by 5.4 per cent. The fund is managed by Anoop Bhaskar.
The fund aims to generate capital appreciation by investing in a diversified portfolio of leading stocks in the respective sectors. The aim is to invest across market capitalisation, with large caps comprising around 65 per cent of the portfolio.
Performance
The fund has outperformed its benchmark (S&P BSE 100), the category benchmark (CNX Nifty Index) and the category across various time frames (one, three, five, seven and 10 years). Over the past seven years, the fund has given an annualised return of 10.81 per cent compared to its benchmark’s 6.98 per cent, the category benchmark’s 7.30 per cent and category’s 8.99 per cent.
An investment of Rs 1,000 since inception (May 18, 1992) in the fund would have appreciated to Rs 10,751 as of December 11, 2013 at a compounded annualised growth rate (CAGR) of 11.63 per cent. The same amount invested in the fund’s benchmark and category’s benchmark would have grown to Rs 7,177 at 9.56 per cent (CAGR) and Rs 6,639 at 9.17 per cent, respectively.
A monthly investment of Rs 1,000 over a 10-year period until December 11, 2013 — under a systematic investment plan (SIP) — would have grown to about Rs 2.45 lakh (on an investment of Rs 1.2 lakh) at a CAGR of 13.81 per cent. A similar investment in the S&P BSE 100 and CNX Nifty Index would have grown to Rs 2.10 lakh at a CAGR of 10.89 per cent and Rs 2.11 lakh at a CAGR of 10.94 per cent, respectively.
The fund’s consistent performance is also associated with lower volatility or market risk (measured by standard deviation). The volatility of 17.98 per cent is less compared to the S&P BSE 100 (21.41 per cent), CNX Nifty Index (22.03 per cent) and the category (19.21 per cent) over a three-year period ending December 11, 2013.
The fund has been close to fully invested, with an average 94.89 per cent exposure to equity over the past three years ending November 2013. In terms of market capitalisation, the fund is biased towards large-cap with an average 87 per cent of its equity exposure in CRISIL-defined large-cap stocks (top 100 stocks based on average market capitalisation on the National Stock Exchange) over the past three years.
According to the mandate, the fund maintains a highly diversified portfolio. In the past three years ending November 2013, the fund has an average of 72 stocks in its portfolio compared to the category’s 41. Of 68 stocks in November 2013, the fund consistently held 45 stocks constituting 77 per cent (average exposure) of the total portfolio during the three-year period. The fund has an average 40 per cent exposure towards the top 10 stocks compared to category’s 50 per cent. At a sector level, the fund has 58 per cent exposure to the top five sectors, which is in line with the category’s exposure.
Over three years, the fund has been overweight on sectors like pharmaceuticals and consumer non-durables, and underweight on sectors like industrial capital goods and non-ferrous metals has helped the fund outperform S&P BSE 100 as well as the category. These industries represented by CNX Pharma Index, CNX FMCG Index, S&P BSE Capital Goods and CNX Metal gave 14.02 per cent, 22.79 per cent, -13.28 per cent and -17.51 per cent annualised returns, respectively, compared to 1.19 per cent of S&P BSE 100 and 1.75 per cent of the CNX NIFTY Index over the three-year period ended November 2013. The fund’s superior stock selection, such as Sun Pharma, ITC, TCS, Shree Cements and Eicher Motors, has helped the fund outperform over the same period.
CRISIL Research