Skip to main content

Mutual Fund Review: UTI Wealth Builder Series II

THE key to optimise returns on any investment is to diversify the risk of the portfolio across various asset classes. And this is precisely UTI Wealth Builder Series II has focused on since its launch towards the end of the financial crisis in November 2008. It has learnt the lessons the hard way. It has seen the sharp decline of equity assets due to the global uncertainties and gold gaining the momentum. As a result, UTI launched the scheme that aimed to get the best of both these asset classes — equity and gold.


   Two years down the line, this notion of combining the two asset classes seems to have finally paid off. UTI Wealth Builder Series II, which took off with just about 100 crore of assets has grown six times in size over the past two years. The fund currently has assets of over 600 crore. And not only has the timing of the fund proved just right for the fund house as it has invested in equities when they were at an all-time low, coupled with its investment in gold has turned out to be an added advantage. The price of the yellow metal has skyrocketed over the past two years. Clearly, early investors of UTI Wealth Builder Series II would be very happy with their returns from this scheme.

Performance:

UTI Wealth Builder Series II is just about a couple of years old and does not have a long performance history. However, even in these two years, the fund has performed fairly well. As the scheme's portfolio comprises equity and gold, its performance can be compared with a suggested model benchmark (as suggested by UTI mutual fund house) — incorporating returns of both these asset classes in the ratio of 65:35 to BSE 100 equity index and prices of gold in India, respectively.


   Since its launch in 2008, UTI Wealth Builder Series II has generated about 100% returns till date. The model benchmark index has returned about 91% during this period while the broader Nifty index has delivered about 102% returns so far during this period.


   If one were to analyse the yearly performance, 2009 — the year of market recovery — saw the fund generating about 73% returns as compared to 64% returns by the model benchmark and 76% returns by the Nifty.


   In the current calendar year, UTI Wealth Builder Series II has returned about 14% gains so far against 16% returns by its model benchmark index and 14% returns by the Nifty.

Portfolio:

With the gold price rising more than 50% over the past couple of years, UTI Wealth Builder Series II has definitely been a beneficiary of this upsurge. The fund has been gradually increasing its exposure in gold ETFs (exchange traded funds) from about 8.5% in early 2010 to nearly 10% by the end of the current calendar year.


   Another factor that has worked in favour of this fund is the timing of its launch in November 2008 when most blue-chip stocks were available at very low prices. One can find scrips like ICICI Bank, HDFC Bank, SBI, BHEL, GAIL, Cairn India and Titan Industries at extremely lucrative valuations. As the fund has been holding on to these stocks from early 2009 to till date, each of them, having appreciated multifold since then, has boosted its net asset value (NAV) tremendously.


   The fund has invested in Nestle India, Petronet LNG and Kotak Mahindra Bank and also has yielded decent returns. In fact, if one were to analyse the notional profit quotient of the fund from its current portfolio, almost 94% of its equity holdings are currently in the green zone. They are quoting a price higher than the price at which these were invested into. As far as the diversification is concerned, its 600 crore portfolio is decently diversified into about 31 equity stocks, gold ETFs and other assets like bank deposits.

Our View:

UTI Wealth Builder Series II has introduced an altogether different concept of investing in the mutual fund industry by diversifying its portfolio, across asset classes. Moreover, the scheme's choice of equity stocks and the returns thereon have also been commendable so far. Investors can definitely consider this scheme as an investment option.

 

Popular posts from this blog

Mutual Fund Exit Load Changes

Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Buy Gold Mutual Funds Leave a missed Call on 94 8300 8300 Mutual Fund Exit Load Changes AMCs don't communicate about any change in exit load directly with investors, but do update on their website   The exit load applicable to your investments is the load which existed at the time when you invested in the particular fund. Any subsequent changes in the exit load will not be applicable to your investments.   However, Asset Management Companies ( AMCs ) periodically publish addendums in the newspapers, which state any change in exit loads of specific schemes managed by them. Such changes are also posted on their websites. However, a direct communication to an investor is not made, considering the costs involved in doing so. In their own interests, investors should not only track the performance of the funds they i...

Atal Pension Yojana contribution Tax Benefit for spouse

Contributions to Atal Pension Yojana (APY) are eligible for the same tax benefits as the NPS. This means that the contributions can be claimed under Section 80CCD (1B). The current limit for Section 80CCD (1B) is   Rs   50,000, over and above the   Rs   1.5 lakh limit under Section 80C. Section 80 CCD (1) is a different one, meant to cover employers' contribution towards NPS . You cannot get tax benefit by investing in the name of your spouse under Section 80 CCD . ------------------------------ ----------------- Invest Rs 1,50,000 and Save Tax under Section 80C. Get Great Returns by Investing in Best Performing ELSS Mutual Funds Top 10 Tax Saver Mutual Funds to invest in India for 2016 Best 10 ELSS Mutual Funds in India for 2016 1. BNP Paribas Long Term Equity Fund 2. Axis Tax Saver Fund 3. Religare Tax Plan 4. DSP BlackRock Tax Saver Fund 5. Franklin India TaxShield 6. ICICI Prudential Long Term Equity Fund 7. IDFC Tax Advantage (ELSS) Fund 8. Birla Sun Life Tax Relief 96 9. ...

Birla Sun Life Mutual Fund Launches Birla Sun Life NIFTY ETF

Birla Sun Life has launched a new fund namely, Birla Sun Life Nifty ETF, an open ended exchange traded fund. The new fund will be open for subscription from 4th July to 18th July 2011, at an offer price of Rs 10 per unit. The investment objective of the scheme is to generate returns that closely correspond to the total returns of securities as represented by S&P CNX Nifty, subject to tracking errors. No exit load will be charged under the scheme. The performance of the scheme will be benchmarked against S&P CNX Nifty and will be managed by Satyabrata Mohanty.   -----------------------------------------------------------------   Also, know how to buy mutual funds online:   1) DSP BlackRock Mutual Funds: http://prajnacapital.blogspot.com/2011/05/buying-dsp-blackrock-mutual-funds.html   2) Reliance Mutual Funds: http://prajnacapital.blogspot.com/2011/06/buying-reliance-mutual-funds-online.html   3) Birla Sunlife Mutual Funds: http://prajnacapital.blogspot.com/2011/...

Mutual Fund Reivew: Birla Sun Life Asset Allocation Conservative

Birla Sun Life Asset Allocation Conservative has numbers on its side to prove its credibility… Don't be surprised to find this Fund of Funds ( FoF ) in our recommendations. It has earned its place. And despite the difference in the structure of the product, there is no arguing with the numbers.   Of the total 6 years of its existence, the fund has been among the top 10 funds in its category in four of them. Last year it put up an average show and the only year it underperformed its peers was in 2008.   One aspect to look at when investing in an FoF is the expense ratio. The expense ratio of an FoF is capped at a lower limit of 0.75 per cent (2.50% for an actively managed fund). However, the FoF not only has its own expense (though lower) but even the expense ratio of the fund it is investing into. Fortunately, the fund manager takes that into account. "Expense is one of the important criteria used for fund selection and is the main reason for our investment in BSL Ind...

Short-Term Investment Options in Mutual Funds

Mutual funds offer liquid funds and ultra short term funds in the debt category, which are suitable for short investment periods. Ultra short-term funds were earlier known as liquid plus funds. Liquid funds invest in money market instruments with a maturity of 91 days or less. However, there are no such restrictions for ultra short-term funds. Who should invest in these? These are open-ended schemes. Investors with a short investment horizon or with surplus cash and low risk appetite should look at these. These could include corporate as well as retail investors. Those interested in staying invested for less than 15 days can opt for liquid funds. Retail investors who want to remain invested for two-four months, can look at ultra short-term funds. The short duration for both liquid and ultra short-term funds shields them from any interest rate volatility.   What kind of returns do they offer? In terms of an investment period less than 15 days, these funds are comparable to a ba...
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now