Why the UTI Opportunities Fund is a great buy?
The Fund has consistently given super returns since inception. The fund was launched in 2005 and has had to bear the brunt of the severe downturn in 2008. However, since inception it has given a return of 18 per cent. Now, this is a pretty decent return when considering any asset class, including real estate or bank deposits. In fact, the latter could have returned not more than 10 per cent and on compounding basis maybe a yield of close to 12 per cent.
In the last one year the scheme has given a return of close to 50 per cent and the three year returns is almost 21 per cent. Having said that we must also be honest enough to admit that the Sensex has also rallied during the period and the returns have also more to do with that rally.
A look at UTI Mutual Funds Opportunities Fund portfolio
A look at the portfolio and you would realise why the returns have been good. The portfolio comprises bluechip stocks, including the likes of Tata Consultancy Services, Infosys, HDFC Bank, ICICI Bank, Maruti Suzuki and Reliance Industries.
Chances of further gains
If the markets rally further, the chances of further gains in the net asset value (NAV) cannot be ruled out. Already, the NAV has gone-up significantly and you are now buying at a very high NAV. Therefore, what we would advise is to wait for sometime, let the markets fall and then buy the UTI Opportunities Fund.
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Other details of the fund
The assets under management of the fund is currently close to Rs 4000 crores as at the end of June, 2014. The expense ratio is around 2 per cent. Another important thing to note is that there is an exit load of one per cent, if one exits the scheme before a period of one year. Therefore, make sure you hold the scheme for not less than a year.
As you are aware mutual fund schemes are subject to market risk and so it is with the UTI Opportunities Fund. We are just advising based on the portfolio and the current market scenario, you should seek further professional help before investing.
In any case, what we would suggest is let the markets fall a little and you would get a chance to buy the fund at a slightly lower NAV. Do check all of the UTI Mutual Fund NAV before buying.