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UTI to halve stocks in Mastershare

Janaki Krishnan & Rakesh Sharma

Mutual fund monolith Unit Trust of India is planning to halve the number of stocks in Mastershare's portfolio over the next few months to make it more manageable and facilitate faster churning.

Mastershare, one of the largest schemes in UTI's stable, has assets of Rs 10.55 billion under management with around 150 stocks. This will be progressively reduced to around 75 to 100 in three to four months, fund manager V Suresh said.

The idea is to get rid of stocks which have not been contributing anything to the scheme. "We may either sell the stocks or write off the investments," Suresh said.

In fact, the management is looking at a possible merger of Mastershare and Mastergrowth '93, keeping in mind the relevant objectives of the schemes.

Mastershare is going to be open-ended soon. At present, the scheme's portfolio is skewed in favour of the fast moving consumer goods sector with a weightage of 25 per cent. Infotech constitutes 12 per cent of the portfolio, petrochechemicals 14 per cent, pharmaceuticals 8 per cent and the remaining in other sectors.

The scheme holds around 3 to 4 per cent in cash, which the fund manager feels is enough to take advantage of opportunities in the equity markets.

In spite of the large number of scrips in its portfolio, Suresh said that 80 per cent of the market capitalisation came from its top 25 holdings.

Mastergrowth '93, which went open-ended just before it was due to be redeemed in 2000, has 15 per cent exposure to stocks of public sector undertakings, though the provisions of the scheme allow it to invest up to 50 per cent in such stocks. Non-performance has forced fund managers to pare their holdings in PSU scrips.

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