Publish Date: | Tue, 21 Jun 2022 11:14 AM (IST)
UTI Mastershare Unit Scheme, an open-ended equity scheme, primarily aims to invest in large cap companies having a competitive advantage in their respective sectors. It follows the investing style of Growth at Fair Price (GARP) to choose the stock. This means, given the underlying growth in a company’s earnings, how much is a fair value to buy that stock in the portfolio.
The objective of the UTI Mastershare Unit Scheme is to invest in companies that are fundamentally in control of borrowings, consistent with revenue growth, focus on profitability and generating higher return on capital than cost of capital and consistent operating cash-flow. are strong. Such companies can generate free cash flow for future expansion and avoid diluting existing stocks.
Competitive Franchisee with GARP, with this combined approach UTI Mastershare Unit Scheme can invest in companies where,
1. The market is underestimating the ability of companies to sustain growth over the long term or the benefits of pricing power.
2. The growth trajectory is improving through consolidation, industry-wide event through consolidation, approval of regulatory hurdles or company specific factors such as cost competitiveness, prudent capacity expansion.
3. Business is capital intensive but companies make prudent investments.
4. Companies that have an opportunity to reinvest cash flow at high return on capital employed (ROCE).
5. Relative valuations within the sector are attractive.
This in turn gives investors an opportunity for long term wealth creation by being portfolio owners of quality companies.
UTI Mastershare Unit Scheme is classified as a large cap fund. It has a portfolio of renowned companies like Infosys Ltd., ICICI Bank Ltd., HDFC Bank Ltd., HDFC Ltd., Bharti Airtel, Reliance Industries, Tata Consultancy Services Ltd., State Bank of India, L&T etc. The top 10 stocks account for about 48% of the portfolio. The scheme is currently with more emphasis on Healthcare, Automobile & Auto Components, Consumer Services, Telecommunication and Capital Goods and less emphasis on Oil & Gas, FMCG, Power, Metals & Mining & Financial Services till 31st May 2022.
The fund has Rs 9566 crores as on 31st May 2022 with more than 7.23 lakh live investor accounts. The objective of the fund is to generate capital and/or achieve income distribution over the long term. As stated above, it follows a disciplined approach to investing and maintains an annual dividend stream every year. Since its inception, UTI Mastershare Unit Scheme has distributed dividend of more than Rs.4200 crores.
The UTI Mastershare Unit Scheme since its inception on 31 May 2022 has generated a return (CAGR) of 15.58% as against the 14.20 per cent return of the benchmark S&P BSE 100 TRI. Moreover, Rs 10 lakh invested in the fund at the time of inception has gone up to Rs 17.44 crore today. That is, 174 times the return has been received in the last 35 years.
Posted By: Arvind Dubey