UTI Equity Fund has been a consistent performer generating good returns to investors in the last few years. CRISIL has rated the Fund as number one and with good reasons. Value Research Online has also accorded the fund a 5-star rating.
The Fund has generated super returns in the last few years. In the last one year the fund has generated a return close to 50 per cent, while the two year returns have been 25.8 per cent, three year returns have been 25.8 per cent and the five year returns has been 15.3 per cent. In most cases the fund has beaten returns generated by the Sensex and the Nifty.
If the Sensex continues to rally we may find that the returns may continue to beat the Sensex and the Nifty.
Blue Chip Portfolio
The UTI Equity Fund has some high quality stocks like Infosys, ICICI Bank, TCS, HDFC Bank and Reliance Industries. Most of these stocks are good quality names and are leaders from their respective sectors.
One can invest in the fund through the systematic investment plan, wherein a small amount of Rs 500 is needed. There is an exit load of one per cent if one invests the money and withdraws before a period of one year. As at the end of November the fund has assets under management of close to Rs 4000 crores.
The fund has declared a dividend of Rs 1.75.
Should you invest in the Fund?
The fund being a large cap fund, it's performance would depend on how most of the large cap names, particularly the likes of Infosys, TCS, Reliance Industries and other funds perform. The only worry for the fund is that we see heavyweightage to select technology stocks. Any sharp fall in tech stocks could lead to some decline in the net asset value of the fund. For example, as we write the TCS stock has fallen by almost 4 per cent as it has signalled a weak quarter. Hence, any such decline in the stock prices of tech stocks could be a problem for the fund.
As mentioned earlier UTI Equity Fund has huge exposure to large cap stocks. Any decline in the Sensex and the Nifty could drag the performance of the fund lower. Probably, you can look to invest in the fund when the markets correct a little more, though one must admit that it is very difficult to time the markets.