Exit of Anoop Bhaskar of UTI Mutual

The news is out that UTI AMC’s leading fund manager and Head – Equity Anoop Bhaskar will leave the AMC. Anoop Bhaskar manages UTI Equity, UTI Opportunities, and UTI Mid-cap, all of which are star performers. Other funds under his management include UTI Transportation & Logistics.

UTI Equity and UTI Opportunities, both large-cap funds are a part of the core portfolio for many investors. While the latter fund has been a bit under the weather, of late, UTI Equity holds a stellar performance record. The departure of Anoop Bhaskar is certainly big news.

Should this be a cause for alarm and an exit from UTI funds? Our suggestion is that investors in these funds continue to hold their investments. We will, for our part, watch for further developments on fund manager takeover as well as the performance of the said funds.

Though one would like it, it is hardly possible that fund managers stay with the fund or the AMC for all time. Fund managers moving on to new assignments need not spell catastrophe if processes for stock selection and fund management are clearly defined and firmly implemented. This is where UTI’s fund management process provides comfort.

The fund bases its views and further strategies for stock selection by largely tracking 5 key factors – inflation, interest rates, credit growth, corporate profitability, and valuations. Filtering at each stage results in a defined universe of stocks that are investment-worthy; stock picks do not, therefore, depend solely on fund manager views.

UTI has an additional layer of stability from its strategic investor T. Rowe Price, a global investment management firm that has been around for several decades and $725.5 billion in assets under management. This partnership has brought in a disciplined approach to the investment process.

Dependence on one fund manager does bode ill for an AMC. But where there are other strong and well-groomed managers who can step up, the concern abates. This is the second area where UTI holds up well with managers such as Swati Kulkarni, Lalit Nambiar and Sanjay Dongre.

In a nutshell, the clearly designed fund management process and the presence of other stalwart managers offer comfort for now. The new fund managers have not yet been announced.

We are also in the process of our quarterly Select Funds list review, which currently features UTI Equity, UTI Opportunities, and UTI Mid-cap. We will provide further updates when the review, based on our usual performance metrics, is completed.