When it comes to the performance, the scheme not only trails peers, but also its own funds. For new investors in the diversified equity fund space, there will not be any dearth of choices. And, that is for sure
UTI Master Plus '91 (launched in 1991) is a diversified equity mutual fund scheme. Its asset size is less than 1,000 crore and its average performance has made investor interest wilt.
PERFORMANCE:
The scheme's returns have been at par with benchmark Sensex. In 2011, the scheme has returned -3.8%. In the last 12 months, it gained about 13.2%, outperforming 10% return of Sensex. In bullish 2007, the fund returned just about 47.5%, at par with Sensex. During the same period, diversified large-cap equity schemes gave more than 50% returns.
In the meltdown year of 2008, the fund recorded a decline of about 54% in its net asset value against 52% fall in Sensex. It was among the bottom five in the category of diversified large-cap equity schemes. The fund did not attract much investor interest even in the recovery year of 2009. Despite Sensex having returned more than 81% and category average being more then 71%, UTI Master Plus '91 disappointed once again with 69%. In 2010, its performance was at par with Sensex.
In the past five years, the fund has delivered a CAGR of about 7.6% against Sensex CAGR of more than 10%. However, investors who have been extremely loyal with the scheme, having stayed invested for more than 10 years, can feel good about the fact that the fund has returned a decent 20% CAGR during the period.
PORTFOLIO:
Though benchmarked to the Sensex, the scheme's universe is not restricted to the 30 Sensex scrips alone. Moreover, most of its holdings are more than three years old, clearly yielding benefits of long-term holding. Some of these non-Sensex multibaggers include Union Bank of India, Aditya Birla Nuvo, Bharat Electronics, and Punjab National Bank. The fund maintains a longterm holding strategy with its portfolio with occasional churns. On the sectoral front, the fund has been pretty optimistic on financials for quite some time now as a majority of its older holdings belong to this sector. This includes stocks like ICICI Bank, Kotak Mahindra Bank, Indian Bank, PNB, IDFC, SBI and Union Bank. Surprisingly, Axis Bank and HDFC Bank are missing from its financial portfolio though the fund has exposure in HDFC. Other prominent sectors for the fund are energy, technology and automobile.
As far as portfolio risk quotient is concerned, it currently commands a beta of 0.9 indicating that for every 1% rise or fall in the Sensex, the fund's returns are bound to rise or decline by about 0.9%.
OUR VIEW:
As far as performance is concerned, the scheme not only lags peers, but also own funds like UTI Dividend Yield. There are better options for new investors in the diversified equity fund space while existing investors can consider switching to better performing funds from the same fund house.
