Sunday, 23 November 2008

UTI Mahila Unit Scheme: Invest

UTI Mahila Unit Scheme is a good investment option for women investors looking for a debt-oriented fund as part of their core portfolio. The fund’s consistent performance across market cycles and superior return (in the debt category) over three- and five-year period builds a good investment case.

High debt allocation with a marginal exposure to equity that is capped at 30 per cent provides comfort for a conservative investor. The scheme is open for resident and as non-resident Indian women above 18 years.

Performance: The fund’s five-year performance chart sports a compounded annualised return of 14.2 per cent — topping the debt-oriented fund category. Over the same period, the fund outpaced the category average by 5 percentage points.

In the shorter time-frame of one year it has generated -8.7 per cent, 0.7 percentage points less than the category average. The securities held in the debt portfolio have a yield to maturity of 10.25 per cent, thus partially containing the loss during this period. On the equity front, exposure to pharma stocks has also mitigated declines in the portfolio.

The fund’s average maturity period of two years (as of October), however, appears short-term, what with clear signs of an impending decline in interest rates. The management has stated that the fund has been actively managing its debt portfolio on the back of softening interest rates. New securities could also have higher maturity periods to lock into the higher interest rates.

Portfolio Overview: The fund’s debt and cash component in the October portfolio accounted for 85 per cent of the assets, with the rest were invested in equity. A sizeable proportion of the assets were invested in triple-A rated company bonds and the balance between pass-through certificates (securitised debt) and government securities.

On the equity side, pharmaceuticals, capital goods and banks have been the preferred sectors for the last few months. The fund preferred a buy-and-hold strategy in equity and has not churned the portfolio much. Since the beginning of the correction, the majority of the equity holdings in the portfolio were retained without much change.

Fund facts: The fund was launched in March 2001.The fund is jointly managed by Mr Amandeep S.Chopra and Mr Deb Bhattacharya. Being debt-oriented, it charges an entry load of 1.5 per cent and exit load of 0.75 per cent if redeemed with a year from the date of allocation. The fund is also subject to short-term and long-term capital gains. The NAV per unit is Rs 29.5.

Source: TheHinduBusinessLine

No comments:

Post a Comment

DISCLAIMER: The author is not a registered stockbroker nor a registered advisor and does not give investment advice. His comments are an expression of opinion only and should not be construed in any manner whatsoever as recommendations to buy or sell a stock, option, future, bond, commodity, index or any other financial instrument at any time. While he believes his statements to be true, they always depend on the reliability of his own credible sources. The author recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction, before making any investment decisions, and that you confirm the facts on your own before making important investment commitments.