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

SBI Magnum Tax Gain Scheme 1993 Applcation Form

    https://sites.google.com/site/mutualfundapplications/tax-saving-mutual-funds-elss     Investment Details Basics Min Investment (Rs) 500 Subsequent Investment (Rs) 500 Min Withdrawal (Rs) -- Min Balance -- Pricing Method Forward Purchase Cut-off Time (hrs) 15 Redemption Cut-off Time (hrs) 15 Redemption Time (days) -- Lock-in 1095 days Cheque Writing -- Systematic Investment Plan SIP Yes Initial Investment (Rs) -- Additional Investment (Rs) 500 No of Cheques 12 Note Monthly investment of Rs 1000 for 6 months and quarterly investment of Rs 1500 for 4 quarters.

Birla Sun Life Tax Plan Online

Invest Birla Sun Life Tax Plan Online   An Open-ended Equity Linked Savings Scheme (ELSS) with the objective to achieve long-term growth of capital along with income tax relief for investment.   After a bad patch from 2008 to 2010, Birla Sun Life Tax Plan has made a big comeback in the last five years, with a particularly good run since 2014. The fund's rankings, which had slipped to two stars in 2011-12, recovered sharply to three-four stars in the last three years. The fund has delivered a particularly large outperformance over its benchmark and peers in the last couple of years. The fund's investment strategy focuses on a diversified and high-quality portfolio, with parameters such as capital ratios and balance-sheet strength used to judge quality. It uses a combination of top-down and bottom-up approaches to take sector/stock positions. The fund avoids highly leveraged plays. Staying more or less fully invested at all times, the fund parks roughly half of its portfoli

Should you Roll Over 1 year Fixed Maturity Plans?

The period between January and March typically sees an uptick in the launch of fixed maturity plans, or FMPs. Not this year. Instead, fund houses are busy rolling over or extending the tenure of their one- year FMPs launched last year to three years. Investors in one- year FMPs have a choice. Either redeem units or roll over to three years. If you exit now, your gains will be added to your income and taxed in line with your individual slab rate of 10, 20 or 30 per cent. If you stay invested for two more years, you pay 20 per cent tax with indexation benefit. Yields have softened in the past few months on expectations of a rate cut. If the central bank continues its soft monetary stance, yields are likely to fall further. In such a scenario, it makes sense for investors, particularly those in the 30 per cent tax bracket, to roll over their investments and lock in at a higher yield now. In a surprise move, the Reserve Bank of India cut repo rate by 25 basis

Mutual Fund Review: IDFC Premier Equity Fund

  IDFC Premier Equity Fund, which falls under the presumed high risk group of mid- and small-cap schemes, can rely on astute and timely equity picks. These make it less vulnerable to fluctuations compared with others in the category   IDFC Premier Equity Fund is designed to invest in upcoming, but promising businesses available at cheap valuations, and hold on to these businesses until they reap desired returns. The experiment has been successful so far, and IDFC Premier Equity has emerged as one of the top performing mutual fund schemes in the mid- and smallcap category of equity schemes.    While the scheme is an open-ended equity fund, i.e. open for subscriptions throughout the year, it has a unique philosophy to limit fresh inflows. Thus, while an investor can always take the systematic investment plan ( SIP ) route to invest in the scheme throughout the year, inflows through a lumpsum investment have been restricted. Since inception, IDFC Premier Equity has been opened for l

IDFC Premier Equity Fund dividend

  IDFC Mutual Fund   has announced dividend under the dividend option of   IDFC Premier Equity Fund Direct-D . The quantum of dividend shall be   R 4.3464 per unit.   The record date has been fixed as May 06, 2015. Best Tax Saver Mutual Funds or ELSS Mutual Funds for 2015 1. ICICI Prudential Tax Plan 2. Reliance Tax Saver (ELSS) Fund 3. HDFC TaxSaver 4. DSP BlackRock Tax Saver Fund 5. Religare Tax Plan 6. Franklin India TaxShield 7. Canara Robeco Equity Tax Saver 8. IDFC Tax Advantage (ELSS) Fund 9. Axis Tax Saver Fund 10. BNP Paribas Long Term Equity Fund You can invest Rs 1,50,000 and Save Tax under Section 80C by investing in Mutual Funds Invest in Tax Saver Mutual Funds Online - Invest Online Download Application Forms For further information contact Prajna Capital on 94 8300 8300 by leaving a missed call --------------------------------------------- Leave your comment with mail ID and we will answer them OR You can write to us at PrajnaCapital [at] Gmail [dot]
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