Build A Quality Backed Portfolio With UTI Opportunities

Online, October 19, 2012 (Newswire.com) - Strategy
This funds invests in 4-5 sectors of the economy that are expected to outperform the broader market in short- to medium-term. It also adopts a mix of momentum and defensive approach to allocation, which has helped the fund do well when the markets have done well and managed to check the fall during bear phases. This approach is reflected in its current portfolio which is overweight on Construction, Engineering and FMCG and under-weight on Energy, Technology and Automobile, compared to the Nifty.

It maintains about 8 per cent cash allocation, which helps in containing the downside, without losing on opportunities when the market rebounds. For instance, in 2008-09, the fund manager moved the cash to as high as 35 percent to limit the slide, which paid off. In 2011, this fund reduced its exposure to banks on concerns over rising NPAs, but as soon as the valuations got attractive the fund increased its exposure to banking and financial services sectors, which top the allocation.

Performance
This fund started as a multi-cap fund in 2005. In 2006 it clocked a return of 10.89 per cent, which was 30 per cent lower than the benchmark BSE 100. However, since 2007, this fund has emerged into a steady performer in the large- and mid-cap category and has significantly done better than the benchmark and category average every year. The large-cap orientation with close to 70 per cent in the large stocks has stabilized the fund's performance and the fund was the second best performer in the category in 2011.

Investments in quality stocks like ICICI Bank, HDFC Bank, Cairn India, Infosys, TCS, ITC, have contributed to the fund's performance, with these six stocks accounting for over 20 per cent of the portfolio in the past two years. The positive feat has also meant that the fund's assets have grown to 2,780 crore, as on June 30, 2012.

Why invest?
The mutual fund invests mostly in stocks from the Nifty basket, while others are largely from the BSE 100 index, which makes for a quality portfolio. A consistent performer after a bad start in 2006, this fund has a proven record of limiting downside as well as outperforming markets in a rally.