UTI Opportunities Fund bullish on consumer goods, energy stocks

Getting the best out of the stock market and maximizing the benefits of investing in the equities are often about being quick to spot the right opportunities provided by potentially high-growth sectors and book the profits.

UTI Opportunities Fund, an open ended equity fund with nearly Rs 1,517.26 crore as assets under management, attempts to provide investors with superior returns by opportunistic investments.

As per the scheme's portfolio as of March 31, 2011, the fund management team, headed by Harsha Upadhyaya, is bullish on the consumer goods sector in a big way. This sector represented by ITC Ltd, Titan Industries, Nestle India, Colgate Palmolive, and Glaxosmithkline Consumer Healthcare totals around 19 per cent of the scheme's portfolio. Sales by consumer companies provide a good barometer of the country's spending power and the thriving business at present times explains the bullishness by UTI's fund managers.

Energy stocks are a clear favourite as well. The sectoral stocks, which represent 16 per cent of the scheme's portfolio, include Petronet LNG, GAIL, Cairn India, NTPC and Lanco Infratech. Large demand supply mismatch in energy sector coupled with policy initiatives like pricing deregulation have led to overweight stance on the sector.

Banks and financial services stocks are also in favour. Heavyweight stocks such as HDFC, State Bank of India, Crisil, Kotak Mahindra Bank, ICICI Bank, and HDFC Bank represent this sector in the UTI Opportunities Fund. The scheme has invested over 16 per cent of its assets in this sector. As a sector outlook, UTI sees an improvement in credit growth, while NPAs are not so much of a concern anymore.

Automobile and related stocks - fronted by Tata Motors, Exide Industries, and Ashok Leyland - contribute to 10 per cent of the portfolio. Since UTI is positive on cement stocks from a long term perspective, the inclusion of Grasim Industries, Ambuja Cements, ACC and Ultra Tech Cement comes as no surprise. Incidentally, it is one of the few funds in the industry which has taken bold and contrarian call on cement recently and has benefited from the upmove. The cement sector contributes 10 per cent of the portfolio.

Meanwhile, the software sector - represented by Tata Consultancy Services and Infosys - together brings up more than 8 per cent. On the infotech sector, UTI will continue to stay invested as the sector is not susceptible to interest rate fluctuations.

Glenmark Pharmaceuticals, Glaxosmithkline Consumer Healthcare and Sun Pharmaceuticals from the pharmaceutical sector - cumulative holding at 6.36 per cent - also feature among the prominent holdings.

The UTI Opportunities Fund has outperformed its benchmark BSE-100 index consistently over the years. Returns calculated based on the Fund's NAV show one-year returns at 14.23% vis-à-vis 8.55% of the BSE index, while corresponding three-year and five-year returns are at 15.59% (7.04% for BSE-100) and 12.69% (11.32% for BSE-100).

The Fund is seen as ideal for those investors who are aware of sector rotation strategies and who want to capitalize on unfolding opportunities in response to changing trends. Also, it is advised for those investor groups who are looking to reduce the degree of risk of a pure sector fund and neutralize cyclical downturns as well. Investors have the option to choose between two plans - Growth and Dividend with payout.

The Fund, in recent months, has received a 4-Star rating from Value Research, a Gold Rating by ET MF Tracker, and a CPR 2 by Crisil. Previously, it had won the prestigious Business World award as India's best open-end diversified equity scheme and the Morning Star award under the same category in 2009.

Source:http://www.adityabirlamoney.com/news/479787/10/22,24/Mutual-Funds-Reports/UTI-Opportunities-Fund-bullish-on-consumer-goods-energy-stocks