A Stable Player for Volatile Times
Investors who wish to use the current equity market volatility to start building an equity portfolio can add UTI Opportunities as a part of their core holding. A large-cap bias, ability to contain downside and consistent performance over the last 5 years, make this fund a good choice.
The fund delivered 13% annually over the last 5 years. That’s a good 9 percentage points against its benchmark BSE 100. It is also far superior to the category average of 5.5% annually over the same period.
The Fund and its Suitability
UTI Opportunities is a ‘go-anywhere’ fund that seeks to invest across sectors and market-cap segments where it sees opportunities. Like most opportunity funds, it did seize the opportunities across market caps. But in more recent years, since the takeover of Anoop Bhaskar as the fund manager in mid-2011, the fund has steadily seen a large-cap bias in its portfolio.
While Anoop Bhaskar has for long been a ‘mid-cap specialist’ (in his earlier stint with Sundaram Mutual), his strategy towards this fund appears to be borne out of a need to provide stability in a prolonged volatile market. And UTI Opportunities has done just that with its bias for large caps.
UTI Opportunities can form a part of an investor’s core portfolio for its above characteristic. Given the uncertainty in corporate earnings, a steep increase in the cost of borrowing for companies and a general slump in consumption and investment sentiment, investors starting a portfolio may be better off sticking to large-cap stocks, whose companies can withstand these pressures better.
Besides, the recent correction has also ensured that the valuations of many large-cap stocks are no longer at a premium.
Investors can consider taking the SIP route to invest in equity funds at this point. Markets can be expected to be in a broad bear grip with short rallies (such as the one seen in the last couple of days) that are unlikely to be sustainable. Opportunities to average costs therefore remain ripe over the next one year.
Performance
UTI Opportunities, similar to most other equity funds as well as broad markets, gave up some gains in the market turmoil in 2013. As a result, its one year return is a mere 6.4%. That’s still better than the less than 3% return managed by the diversified fund category on an average.
The fund managed to hold to some gains in a bear-dominated market despite holding less than 5% in cash, thanks to successfully containing downside in 2013 through adept calls. The fund fell 5% thus far in 2013, as against a close to 10% decline in the NAV of equity funds on an average.
The above performance was made possible by some right sector moves such as pruning holdings in an overheated FMCG and upping exposure to the currently more promising IT space.
Over a longer time frame, UTI Opportunities comes across as a stable performer, what with the fund beating its index – S&P BSE 100, 86% of the times on a rolling one-year returns chart over the last 5 years.
On a risk-adjusted basis, the fund scores better than most large-cap peers, but lags behind opportunity funds such as Reliance Equity Opportunities. But that is only to be expected as the latter is a more aggressive fund with a higher mid-cap bias.
Portfolio
UTI Opportunities went into cash for a good part of 2008 and early 2009 to contain declines following the financial crisis. But it did miss out the early part of the 2009 rally as a result. The fund though, appears to have taken a more balanced approach since Anoop Bhaskar’s takeover, moving perhaps 5-8% to cash during market falls.
For instance, it had over 95% invested in equities in its latest portfolio, even while funds such as Quantum Long Term Equity Fund (equally adept at containing declines) held only about 85% in equities. UTI Opportunities’ ability to contain declines with a reasonably high exposure to equities is therefore noteworthy. It may also be a superior strategy to stay invested in equities to take advantage of the quick bear market rallies.
Another fund from the same stable, UTI Equity, too sports a large-cap bias and is managed by the same fund manager. The key difference between the 2 portfolios is that UTI Opportunities holds a more concentrated portfolio of about 40 stocks, as against 70-75 stocks in UTI Equity. The latter has almost the same proportion of mid and small-cap exposure but holds more number of stocks from this market cap.
In terms of sector choice, besides continuing with banking and finance stocks as its top sector, UTI Opportunities recently hiked stakes in the IT space with the addition of Tech Mahindra. It also went underweight on FMCG stock Hindustan Unilever. Hathaway Cable and Datacom, Shree Cement and Adani Ports and SEZ are some of the contrarian picks at this point in time.
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When would one choose UTI equity over UTI opportunities and vice versa? Can you elaborate on the difference from an investor’s point of view?
I considered both for a while and decided on one of them.
Hi Vidya
Nice article once again. I have a question am planning to stop SIP from DSBPR top 100(large cap) once the SIP is completed and planning to start a fresh SIP either in ICICI Pru Bluechip Focused fund(Large cap) or UTI Opportunites fund( large cap , Large and mid cap) as these two are well performed funds compared to DSPBR top 100. whats your opinion on the same.
When would one choose UTI equity over UTI opportunities and vice versa? Can you elaborate on the difference from an investor’s point of view?
I considered both for a while and decided on one of them.
i recently joined fundsindia, I was trying to find this information on the website but could not find it. Irrespective of product
What are the basis of your recommendations? do you EVER have sponsored recommendations? if so is there a disclaimer in there??
Hello sir,
Thank you for your question.
The basis for our recommendations is research. That’s it. We pour over data and analyse quantitative information and use qualitative judgements to arrive at our recommendations. We DO NOT do sponsored recommendations.
thanks,
Srikanth
i recently joined fundsindia, I was trying to find this information on the website but could not find it. Irrespective of product
What are the basis of your recommendations? do you EVER have sponsored recommendations? if so is there a disclaimer in there??
Hello sir,
Thank you for your question.
The basis for our recommendations is research. That’s it. We pour over data and analyse quantitative information and use qualitative judgements to arrive at our recommendations. We DO NOT do sponsored recommendations.
thanks,
Srikanth
Hi Srikanth – Would you be able to help with my query above in Vidya’s absence? I am an existing fundsindia customer.
Hello Kamat,
I looked at both the funds at some depth, and honestly, I can’t pick between the two – their performances, portfolios, risk metrics and even VRO ratings are quite identical. So looking at them as black boxes, I am not able to pick between the two.
Vidya might have a better answer for you when she gets back 🙂
thanks,
Srikanth
Hello Kamat, Sorry for the delayed response.
UTI Opportunities, as mentioned in the article, takes focussed exposure to stocks. Hence, any fall in specific stocks (in which it has high weight) can hit it more. UTI Equity is more diversified and may therefore be relatively less vulnerable. But yes, upside opportunities are higher in UTI Opportunities. You can therefore say, UTI Opportunities is meant to be a higher risk-return proposition than UTI Equity. Hope this helps. Tks, Vidya
Thanks for the review. I have UTI Opportunities in my Fundsindia portfolio. I would like to include UTI Equities in this portfolio. Is it advisable? Also, it would be better if we can have some feature in Fundsindia that allows us to see stock overlaps between different funds (something like what Portfoio X-ray) before we make a choice. This way we can achieve good diversification and avoid funds with similar portfolios.
Hello Guru, I was on vacation and hence the delayed response. I had a look at your portfolio. It lacks a large-cap exposure. While UTI Equity is a good option, you can consider others like ICICI Pru Focused Bluechip to have a different fund manager style. Incidentally, you have 50% f your SIPs going in to consumption-based theme funds. That is not recommended (10-15% is recommended). If you wish tor review this in future, you can use the ‘Ask advisor’ feature available in your account (click the help tab) and seek alternatives based on your time frame and goals.
As for stock overlaps, pl. use the portfolio x-ray (we generated one for you in your downloads section) and you will see the stocks help by most no. of funds (and the name of those funds)in your portfolio. While these will only be top holdings, your portfolio is bound to have plenty of overlap given your exposure to consumer theme.
Thanks, Vidya
Vidya,
Thanks for the reply. It was useful. I will use Ask the Advisor for more suggestions.
a nice article at the appropriate time.thanks. i am an investor in the fund. my earlier conviction proved true by your recommendation.a good work any way.
a nice article at the appropriate time.thanks. i am an investor in the fund. my earlier conviction proved true by your recommendation.a good work any way.
I am 43 and investing Rs 86000/- through MF SIP every month.
I am having a moderate risk appetite and want to be in the investment for 15/20 years window. I have a faith on equity returns and my target is to have 10 cr after 15 years and my MF SIPs are:
1) Franklin – 10k
2) ICICI Pru Blue Chip – 10k
3) BSL Frontline Equity A – 10K
4) UTI Opportunities – 10k
5) HDFC Midcap – 5k
6) IDFC Premiere Equity – 10k
7) SBI Emerging Business – 5k
8) Reliance Equity Opportunities- 10k
9) Templeton India Equity Fund – 4k
10) UTI MNC – 5k
11) BSL Gen Next – 5k.
Please advise whether my portfolio is sufficient enough to achieve the goal of 10 cr in next 15 years or not? If not, then what should the suggested portfolio and Fund mix?
Hello sir,
Assuming an average return of 15% annually on your portfolio, you will likely need 20 years to reach your target of Rs 10 crore. Unless your returns are in the range of 20% annually (which is a very aggressive target and not easy) achieving your target with current savings may be difficult. You can consider tools such as step-up SIPs available with FundsIndia to easily prop up SIPs over this period and increase savings gradually. A regular rebalancing and review of portfolio (to weed out underperformers)will also help you stay on track. We provide portfolio recommendations/suggestions free of cost for our investors’ portfolio in our platform, if they use the ‘Ask Advisor’ feature. Tks, Vidya
I am 43 and investing Rs 86000/- through MF SIP every month.
I am having a moderate risk appetite and want to be in the investment for 15/20 years window. I have a faith on equity returns and my target is to have 10 cr after 15 years and my MF SIPs are:
1) Franklin – 10k
2) ICICI Pru Blue Chip – 10k
3) BSL Frontline Equity A – 10K
4) UTI Opportunities – 10k
5) HDFC Midcap – 5k
6) IDFC Premiere Equity – 10k
7) SBI Emerging Business – 5k
8) Reliance Equity Opportunities- 10k
9) Templeton India Equity Fund – 4k
10) UTI MNC – 5k
11) BSL Gen Next – 5k.
Please advise whether my portfolio is sufficient enough to achieve the goal of 10 cr in next 15 years or not? If not, then what should the suggested portfolio and Fund mix?
Hello sir,
Assuming an average return of 15% annually on your portfolio, you will likely need 20 years to reach your target of Rs 10 crore. Unless your returns are in the range of 20% annually (which is a very aggressive target and not easy) achieving your target with current savings may be difficult. You can consider tools such as step-up SIPs available with FundsIndia to easily prop up SIPs over this period and increase savings gradually. A regular rebalancing and review of portfolio (to weed out underperformers)will also help you stay on track. We provide portfolio recommendations/suggestions free of cost for our investors’ portfolio in our platform, if they use the ‘Ask Advisor’ feature. Tks, Vidya
Hi Vidya,
I am 33. I have been investing equally in the following funds from 3 yrs,
for my retirement corpus;
HDFC Top 200
HDFC Equity G
Since i came to know that portfolios of both hdfc funds are overlapped, i am confused as to which one should i continue? Since rating for both are falling in Valueresearchonline.
I wish to add one core large & mid-cap fund and one mid-cap fund. Can i go for;
UTI Opportunities G
HDFC Midcap G
Thank u
Hello Jai, HDFC Top 200 may continue to be a good fit if you are looking predominantly for large-cap funds. HDFC Equity may require some watch though. The other 2 funds mentioned by you are also good.But we will be unable to recommend you funds unless we have an understanding of your requirement and current portfolio. We do such review fee of cost for all our investors if they use the ‘Ask Advisor’ feature in their FundsIndia Account. Tks, Vidya
Hi Vidya,
I am currently having SIPs for two MF:
HDFC Top 200 – 3k
HDFC Prudence -3k
I am planning to start a new SIP of 3K.
Can you advise me on a fund which can give good returns?
Alpesh, request you to use th ‘Ask advisor’ feature in your FundsIndia account (click help tab) to help us offer you advisory services free of cost and track your queries systematically. Thanks, Vidya
Nice article. Keep up the good work on MF research.
Nice article. Keep up the good work on MF research.
To understand how well or badly a mutual fund is doing and to judge that mutual fund’s performance, it is necessary to understand how they are being judged. The best way to judge a mutual fund is by the risk-adjustment returns. To know what the return is, we must look at the risk that a mutual fund possesses and the returns it gains us. In order to calculate the risk, the monthly and weekly returns of a fund are compared with the monthly risk free returns for hybrid and equity funds. Check out the top performing mutual funds at – http://www.utimf.com/Funds/equity-funds/Pages/uti-top-100-fund.aspx
To understand how well or badly a mutual fund is doing and to judge that mutual fund’s performance, it is necessary to understand how they are being judged. The best way to judge a mutual fund is by the risk-adjustment returns. To know what the return is, we must look at the risk that a mutual fund possesses and the returns it gains us. In order to calculate the risk, the monthly and weekly returns of a fund are compared with the monthly risk free returns for hybrid and equity funds. Check out the top performing mutual funds at – http://www.utimf.com/Funds/equity-funds/Pages/uti-top-100-fund.aspx
Hi Vidya,
I am currently having SIPs for two MF:
HDFC Top 200 – 3k
HDFC Prudence -3k
I am planning to start a new SIP of 3K.
Can you advise me on a fund which can give good returns?
Alpesh, request you to use th ‘Ask advisor’ feature in your FundsIndia account (click help tab) to help us offer you advisory services free of cost and track your queries systematically. Thanks, Vidya
To understand how well or badly a mutual fund is doing and to judge that mutual fund’s performance, it is necessary to understand how they are being judged. The best way to judge a mutual fund is by the risk-adjustment returns. To know what the return is, we must look at the risk that a mutual fund possesses and the returns it gains us. In order to calculate the risk, the monthly and weekly returns of a fund are compared with the monthly risk free returns for hybrid and equity funds. Check out the top performing mutual funds at – http://www.utimf.com/Funds/equity-funds/Pages/uti-top-100-fund.aspx
Nice article. Keep up the good work on MF research.
Hi Srikanth – Would you be able to help with my query above in Vidya’s absence? I am an existing fundsindia customer.
Hello Kamat,
I looked at both the funds at some depth, and honestly, I can’t pick between the two – their performances, portfolios, risk metrics and even VRO ratings are quite identical. So looking at them as black boxes, I am not able to pick between the two.
Vidya might have a better answer for you when she gets back 🙂
thanks,
Srikanth
Hello Kamat, Sorry for the delayed response.
UTI Opportunities, as mentioned in the article, takes focussed exposure to stocks. Hence, any fall in specific stocks (in which it has high weight) can hit it more. UTI Equity is more diversified and may therefore be relatively less vulnerable. But yes, upside opportunities are higher in UTI Opportunities. You can therefore say, UTI Opportunities is meant to be a higher risk-return proposition than UTI Equity. Hope this helps. Tks, Vidya
Thanks for the review. I have UTI Opportunities in my Fundsindia portfolio. I would like to include UTI Equities in this portfolio. Is it advisable? Also, it would be better if we can have some feature in Fundsindia that allows us to see stock overlaps between different funds (something like what Portfoio X-ray) before we make a choice. This way we can achieve good diversification and avoid funds with similar portfolios.
Hello Guru, I was on vacation and hence the delayed response. I had a look at your portfolio. It lacks a large-cap exposure. While UTI Equity is a good option, you can consider others like ICICI Pru Focused Bluechip to have a different fund manager style. Incidentally, you have 50% f your SIPs going in to consumption-based theme funds. That is not recommended (10-15% is recommended). If you wish tor review this in future, you can use the ‘Ask advisor’ feature available in your account (click the help tab) and seek alternatives based on your time frame and goals.
As for stock overlaps, pl. use the portfolio x-ray (we generated one for you in your downloads section) and you will see the stocks help by most no. of funds (and the name of those funds)in your portfolio. While these will only be top holdings, your portfolio is bound to have plenty of overlap given your exposure to consumer theme.
Thanks, Vidya
Vidya,
Thanks for the reply. It was useful. I will use Ask the Advisor for more suggestions.
Hi Vidya
Nice article once again. I have a question am planning to stop SIP from DSBPR top 100(large cap) once the SIP is completed and planning to start a fresh SIP either in ICICI Pru Bluechip Focused fund(Large cap) or UTI Opportunites fund( large cap , Large and mid cap) as these two are well performed funds compared to DSPBR top 100. whats your opinion on the same.
Hi Vidya,
I am 33. I have been investing equally in the following funds from 3 yrs,
for my retirement corpus;
HDFC Top 200
HDFC Equity G
Since i came to know that portfolios of both hdfc funds are overlapped, i am confused as to which one should i continue? Since rating for both are falling in Valueresearchonline.
I wish to add one core large & mid-cap fund and one mid-cap fund. Can i go for;
UTI Opportunities G
HDFC Midcap G
Thank u
Hello Jai, HDFC Top 200 may continue to be a good fit if you are looking predominantly for large-cap funds. HDFC Equity may require some watch though. The other 2 funds mentioned by you are also good.But we will be unable to recommend you funds unless we have an understanding of your requirement and current portfolio. We do such review fee of cost for all our investors if they use the ‘Ask Advisor’ feature in their FundsIndia Account. Tks, Vidya