UTI MF changes tack, opts for side counters

MUTUAL FUNDS OVERVIEW

UTI Mutual Fund sold Sensex heavyweights and frontline stocks while buying mid-cap stocks during the quarter ended September 2004.

The equity portfolio details show that the fund house remained a net seller in the equity market by selling 13.83 million shares. It bought 23.59 million shares of 77 companies and sold 37.42 million shares of 161 companies.

UTI Mutual Fund remained the biggest investor in equity shares in the quarter with a total corpus of Rs 8,968 crore as on September 30, 2004.

With the market sentiment changing from the frontline Sensex stocks to mid-cap and small-cap stocks, the fund house switched its investment strategy accordingly. It bought market favourites and booked profits in frontline stocks.

It sold 88.55 lakh shares of 21 Sensex stocks, including heavyweights like Reliance Industries, State Bank of India, ITC, Hindustan Lever, Hindustan Petroleum Corporation and Bharti Tele-Ventures.

UTI Mutual Fund switched focus to other Sensex stocks like Tata Steel, Infosys Technologies, Satyam Computer, Mahanagar Telephone Nigam, ACC, Oil and Natural Gas Corporation, Bharat Heavy Electricals and Wipro.

Fresh buying was also done in Indian Petrochemicals Corporation, TVS Motors, Gail, GE Shipping, Bharat Forge, Essar Steel and Mahindra & Mahindra. UTI also received 16.67 million shares in the Tata Consultancy Services IPO valued at Rs 171 crore.

The portfolio churning during July-September quarter was sector specific. Like private sector players, UTI sold shares of banks, automobile, cement, telecommunication and fast moving consumer goods companies. Excessive buying was seen in sectors such as steel, information technology, aluminum, pharmaceuticals and shipping.

The information technology sector topped UTI's sectoral allocation list, with an investment of Rs 1157.27 crore. Though the top five sectors "" IT, pharmaceuticals, petrochemicals, banks and refineries "" accounted for 45 per cent of the total investments in equity shares, the IT sector alone accounted for 13 per cent. 
 

Light for heavy
UTI's sectoral allocation	Number of shares		Value of shares, Rs cr
	Jun 30,  2004	Sep 30, 2004	Jun 30, 2004	Sep 30, 2004
Information technology	19,166,512	22,951,487	818.95	1157.27
Pharmaceutical	28,221,914	28,352,936	775.45	965.17
Petrochemicals	20,270,127	20,106,407	610.31	766.40
Banks	26,274,923	21,472,380	658.06	618.97
Refineries	23,042,125	19,642,996	567.78	545.08
Cement	17,358,918	16,961,750	359.41	409.90
Aluminium	8,642,340	8,895,996	295.69	398.65
Telecommunication	27,771,175	26,092,837	354.89	357.02
Steel/composite/alloys	30,978,272	35,286,062	238.79	350.07
Diversified	7,157,321	6,046,273	267.03	275.40
Cigarettes	2,813,080	2,413,678	249.74	274.48
Automobile hcv/mcv/lcv	46,230,557	41,490,382	270.27	246.21
Miscellaneous	17,611,480	17,426,854	158.70	196.57
Automobile tractors	7,558,462	7,492,136	196.24	191.82
Personal care products	13,801,702	12,800,553	201.75	189.27

UTI Mutual Fund invested Rs 965 crore in pharma stocks, Rs 766 crore in petrochemicals, Rs 619 crore in banks and Rs 545 crore in refinery stocks.

UTI sold banking stocks such as Vijaya Bank, Indian Overseas Bank, Bank of Baroda, Oriental Bank of Commerce, UTI Bank, Bank of Maharashtra, IDBI and Corporation Bank.

It also booked profits in stocks recent acquired in IPOs. It sold 2.73 lakh shares of TV 18, around 1.50 lakh shares of TV Today and around 1.20 lakh shares of Patni Computer.

The fund has shown an appetite for mid-cap and small-cap stocks that are fundamentally strong. During the quarter ended September 2004, UTI Mutual Fund picked 12.85 lakh shares of Premier Instruments, 7.32 lakh shares of Asahi India Safety Glass, over four lakh shares each of Tata Elxsi, Motherson Sumi Systems and Mangalam Cement. It bought 3.25 lakh shares of Jord Engineers, 2.15 lakh shares of Elgi Equipment, over 1.50 lakh shares of Biocon, Glenmark pharma, HCL Technologies, Novartis etc.

Apart from frontline stocks, UTI Mutual Fund booked profits in Chennai Petroleum, Ballarpur Industries, Futura Polymers, Alok Industries, Gujarat Alkalies, Whrilpool India, Bata India, Voltas, Punjab Tractors, Balarpur Chinni, Apollo Hospital, Petronet LNG, Polaris Software etc.