The Unit Trust of India's (UTI) Petro scheme turned out to be the sole star-performer among open-ended equity schemes floated by the institution, giving a positive return in a depressed market in first six months of calendar year 2001.
Interestingly, another 17 schemes of the UTI outperformed the market by declining a trifle less than the indices. On an aggregate, these schemes reported a less than 12.5 per cent drop, while in past six months, the Bombay Stock Exchange Sensex has declined 12.97 per cent and the National Stock Exchange S&P CNX Nifty index has slipped 12.47 per cent.
UTI Petro reported a return of 16.13 per cent with scheme's net asset value (NAV) increasing from Rs 12.40 as on December 29, 2000, to Rs 14.40 at end of June 2001.
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The fund's managers attribute the performance to "selective selection of companies with strong fundamentals."
The fund has diversified its portfolio of 12 scrips whose business has been mainly in petroleum and related activities.
However, the drop in the Petro scheme's corpus from Rs 48 crore in December 2000 to Rs 23 crore as on April 2001 indicates a heavy redemption to book profits.
Interestingly, the Alliance Basic Fund, which reported a drop of 3.2 per cent during the period, also outperformed the benchmark indices. A fund with a investment focus in companies sensitive to economic cycles and commodity pricing cycles churned its portfolio to book a lesser drop in NAV.
The fund reduced its exposure in Hero Honda and HDFC Bank even as it exited from Reliance Petroleum. Whereas the fund increased its exposure in Grasim and Indo Gulf Corporation, it bought into HDFC during the period.
Zurich Tax Saver Plan also banked on its diversified portfolio to report just 4.79 per cent drop. A bottom up approach of investing in companies with a long term view and competitive advantage has been the major investment strategy of the scheme. Chandaresh Nigam, fund manager Zurich Tax Saver attributes the performance, to "a diversified approach and better returns on the cement counters."
Interestingly, the other 70 open-ended schemes under-performed the indices to report a drop between 13 per cent to 49 per cent in their net asset value (NAV). Obviously hit were the tech sector funds whose drop in net asset value ranged between 36 per cent to 46 per cent.
The quantum of meltdown in ICE counters could be revealed from the drop in Business Standard ICE (Information Technology, Communication and Entertainment) index that shed 65 points to plunge 43 per cent.
The largest loser was the ING Portfolio Growth which reported a drop of 49 per cent in its NAV. The scheme with a long-term capital appreciation has been hit hard owing to its large exposure to software scrips, which account for over 78 per cent of its portfolio.