102510  |  INF789F01661  |  4 star  |  Neutral

NAV

$ 38.30

1-Day Total Return

-0.01
%
INR | NAV as of 23/06/2017 09:30:00 | 1-Day Return as of 23 Jun 2017

TTM Yield

0.00%

Load

0.00

Total Assets

5.0 bil

Expenses

0.86%

Fee Level

--

Turnover

539%

Status

Open

Min. Inv.

5,000

30-Day SEC Yield

--

Category

Intermediate Government Bond

Credit Quality/Interest Rate Sensitivity

High/Extensive
Author
Morningstar's Take | 12/12/2016
by Kavitha Krishnan

A skilled and experienced portfolio manager and a relatively low expense ratio stand out about this fund. The fund’s slightly conservative approach and focus on investing with a view to protect their downside as opposed to generating top-quartile performance results in a consistent performance that remains marginally above average across market cycles. While we have a positive opinion on the consistency with which the fund is run, we would like to monitor it over the long term before we can build more confidence in the fund’s process. We are also wary of the individual responsibilities shouldered by managers within the investment team. Given these factors, we initiate coverage on this fund with a Morningstar Analyst Rating of Neutral.

Amandeep Singh Chopra has been managing funds since 2006 and has been at the helm of this strategy since February 2012. He's one of the few managers in India with a 22-year association with the same company. While his leadership capabilities stand out, there is a key-person risk associated with him. Our concerns stem from the relatively higher levels of individual responsibilities on the three-member investment team. Sudhir Agrawal has been managing few of the largest fund offerings by the AMC, while Ritesh Nambiar doubles up as fund manager and head of credit research. The analyst team also seems slightly shorthanded: a three-member team including an economist. The three put together have an average experience of about five years

The Gilt L/T fund typically invests in G-Sec papers. Duration positioning is based on the managers' macroeconomic research and their views on interest-rate directional movements. They also constantly track the markets to ensure they are invested in the most-liquid papers that ensure tradability. While they don’t invest in state development loans, the fund’s mandate does not restrict them from doing so. The fund tends to actively trade in gilts to generate alpha and can invest a significant portion of its portfolio in a single paper.

Overall we think that the strategy is poised to maintain consistency in its performance profile over the long term with the exception of periods that are characterised by volatility and market uncertainties that favour short-term investing.

Morningstar Analyst Rating™
Analyst Rating
Portfolio Role

Average maturity can fluctuate significantly; currently runs a higher maturity compared with peers.

People

Led by an experienced manager with a long tenure, we are wary of the associated key-person risk.

Parent

UTI has a strong backing from T.Rowe Price, but certain aspects could be improved in our opinion.

Process

The process hinges on the manager's skill and ability to position the fund across yield curves.

Performance

The fund posted a consistent performance except during periods characterized by extreme volatility.

Price

The fund’s expense ratio is lower compared with the category average.

Important Disclosures

Unless stated otherwise, this report was prepared by the person(s) noted in their capacity as Manager Research Analysts (i.e., fund analysts) employed by Morningstar, Inc., or one of its affiliates. It has not been made available to the issuer prior to publication.

Analyst Ratings are subjective in nature and should not be used as the sole basis for investment decisions. Analyst Ratings are based on Manager Research Analysts’ expectations about future events and therefore involve unknown risks and uncertainties that may cause such expectations not to occur or to differ significantly from what was expected. Analyst Ratings are not guarantees nor should they be viewed as an assessment of a fund’s or the fund’s underlying securities’ creditworthiness.

No material interests are held by Morningstar or the Manager Research Analyst in the financial products that are the subject of the research reports or the product issuer. Regarding Morningstar’s conflicts of interest: 1) Manager Research Analysts’ compensation is derived from Morningstar’s overall earnings and consists of salary, bonus and in some cases restricted stock; however, Manager Research Analysts are neither allowed to participate directly or try to influence Morningstar’s investment management group’s business arrangements nor allow employees from the investment management group to participate or influence the analysis or opinion prepared by them. Further information on Morningstar’s Code of Ethics policies is available from http://corporate.morningstar.com/us/asp/subject.aspx?xmlfile=540.xml

Unless otherwise provided in a separate agreement, you may use this report only in the country in which its original distributor is based. The information contained herein is not represented or warranted to be accurate, correct, complete, or timely. This report is for information purposes only, and should not be considered a solicitation to buy or sell any security. Redistribution is prohibited without written permission.

For Recipients in India: Research on securities as defined in clause (h) of section 2 of the Securities Contracts (Regulation) Act, 1956 (“Investment Research”) is prepared by Morningstar Investment Adviser India Private Limited, which is registered with the Securities and Exchange Board of India. Your access to the Investment Research does not establish an advisory relationship with Morningstar Investment Adviser India. You should seek the advice of a financial professional before making an investment decision to ensure, among other things, that the security is suitable based on your particular needs and circumstances.

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