UTI Index equity Fund

Dhirendra Kumar

Index equity Fund invests in a basket of stocks comprising the BSE Sensitive Index and NSE-50 (Nifty) but does not replicate any of these indices.

Launched in July 1997 as a closed-end fund, the fund will go open-end in August this year. Since launch, Index Equity has given an annualised return of 17.8 per cent against 0.58 per cent by the BSE Sensex and 4.7 per cent by the Nifty. The fund has outperformed the indices for most of the time periods and achieved most of its gains with a portfolio that was a blend of growth and cyclical stocks. The launch followed by a bearish phase, the fund with a cyclical focus closely tracked the broad market and languished below par for one year.

However, the subsequent reshuffling of the portfolio in favour of a balance between growth and cyclical sectors helped the fund smartly dodge the bear markets of 1998 and gain 96 per cent between July 1998 and September 1999. The sensex and the Nifty, for the same period, gained 48.5 per cent and 50 per cent, respectively. Beginning last quarter of 1999, the fund has sustained its performance with a higher allocation to ICE sector until the downslide in the sector knocked off 36 epr cent of its gains.

The active management of the portfolio has so far achieved much more than its objective of outperforming the BSE Sensex and Nifty. Besides, the fund, with a predefined investment universe will have a portfolio of bluechip companies that are also highly liquid. However, being overweight on the ICE sector, the fund will be susceptible to volatility.

Fund Basics
Objective	Size (Cr)	NAV: 26/7/2000	Mkt Price	Prem/Disc	Total Returns (%)
Growth	72.96	16.57	—	—	17.80%
Benchmark Comparisons (%)					30/6/2000
	1M	3M	6M	1Yr	3Yr
Fund	8.0	-15.1	-4.0	27.5	—
Nifty Tot. Ret.	6.7	-3.1	0.2	29.0	8.8
Sensex	7.1	-5.0	-5.1	14.7	3.7
Obj Avg	9.6	-18.2	-13.2	35.3	12.4
Top Holdings (31/3/2000)					Net assets (%)
Infosys Technologies					24.32
Satyam Computer Services					15.12
HLL					7.63
Reliance Industries					5.92
H D F C Bank					5.79
I T C					5.54
MTNL					4.78
Zee Telefilms					3.08
Mahindra & Mahindra					2.86

Source: Value Research

Fund File

Money

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