UTI MF to churn fertiliser, pharma funds

UTI Mutual Fund (UTI MF) is churning the portfolios of 'Master Value' and 'Mastergain' for optimising returns from fertiliser & chemicals and pharma funds.

The combined asset under management (AUM) of these two funds is around Rs 1,500 crore. 'Master Value' is one of the best-performing funds of UTI MF and also of the industry.

UTI MF had declared a 100 per cent dividend in 'Master Value' in January taking its CAGR to 60 per cent in last three years.

'Master Gain' too is one of the biggest diversified equity fund in the MF industry with a size of Rs 1,300 crore.

Vinay Kulkarni, fund manager of Master Value and Mastergain, said the company was increasing the exposure of fertilisers and chemicals like paints in the fund. Besides, it was also switching from banking stocks to auto ancillaries.

"UTI is heavily investing in fertilisers and chemicals and booking profits on banking stocks. Now, UTI has only four per cent weightage of banking stocks in the portfolio of 'Master Value' from the pick weightage of 14 per cent," he added.

According to Kulkarni, it is increasing exposure in paints because he believes that the sector would be the direct beneficiary of spending in housing and infrastructure.

"Fertiliser too is looking good. There will be lot of thrust on agriculture modernisation in coming years and fertiliser companies will be benefited. Similarly, companies in auto components will benefit because of the surge in demand in automobile sector,"he said.

He said Master Value has good exposure in stocks such as Asian Paints (7.2 per cent of NAV), Exide Industries (7.11 per cent), Tata Chemicals (6.76 per cent), ICI India, Indo Gulf Fertilizer, Tube Investments, Ballarpur etc.

Commenting on Mastergain, Kulkarni said it was also trying to position the fund as an aggressive one.

"UTI is investing in pharma stocks and reentering the IT sector where the valuation is now attractive. It is reducing exposure in cement as most of the frontline stocks now look over valued," he added.