New Analyst Ratings

 100651

 |  INF789F01976
 |  3 star
 |  Bronze

NAV

$ 94.13

NAV Day Change

0.33 | 0.36
%
As of  03/08/2015 09:30:00 | INR

TTM Yield

0.00%

Load

Multiple

Total Assets

30.4 bil

Expenses

2.14%

Fee Level

--

Turnover

16%

Status

Open

Min. Inv.

5,000

30-Day SEC Yield

--

Category

Large-Cap

Investment Style

Large Growth
Author
Morningstar's Take | 09/03/2015
by Atul Pahuja

The fund may lack pizzazz but it is a solid offering nonetheless.

Manager Swati Kulkarni has been associated with UTI AMC for the past 21 years and as a portfolio manager since June 2004. Kulkarni has extensive analyst experience and a strong track record as a portfolio manager. Kulkarni follows a benchmark-aware large-cap strategy and usually picks stocks from the S&P BSE 100 index. The portfolio’s sector weights are also loosely aligned to those of the benchmark index. Benchmark heavyweights such as HDFC Bank, Infosys, ICICI Bank and TCS often feature among the top holdings. She attempts to outperform the benchmark by underweighting/overweighting the chosen stocks. She has displayed good stock-picking abilities even with non-benchmark stocks. For instance, her conviction in materials player Asian Paints because of its competitive position and pricing power has paid off over the long haul. Yet, her focus on quality—established names with strong business models and good corporate governance standards—means she stays away from some smaller names, which can result in the fund lagging its more aggressive peers during an upturn. Also, as tactical plays aren’t a part of her strategy, Kulkarni is unlikely to be able to compensate after missing out on an inflexion point.

Notwithstanding the caveats, the mild-mannered approach has its appeal as it can keep the fund competitive on the risk front and deliver pleasing results over the long term. The fund’s performance, especially in the testing markets of 2010 and 2011, has been noteworthy. On Kulkarni’s watch (Nov 2006 to Dec 2014), the fund (up 12.8% annualised) has bettered both its benchmark index S&P BSE 100 (10%) and the category average (11.5%). The performance ranks in the category’s 34th percentile on an absolute return basis and 26th percentile on a Morningstar risk-adjusted return basis. There is no reason to believe she won’t be able to deliver in future as well. Hence, we reiterate the Bronze rating.

Morningstar Analyst Rating™
Analyst Rating
Portfolio Role

Large-cap focused and evidently mindful of the benchmark index.

People

Swati Kulkarni is a competent and experienced manager who is backed by a stable investment team.

Parent

In our opinion, UTI Asset Management Company ranks as an average asset manager.

Process

Kulkarni plies relative valuation techniques with a qualitative overlay when choosing stocks.

Performance

Under Kulkarni, the fund has been a strong performer on risk/reward parameters.

Price

The fund’s price is lower than that of the median offering from the category.

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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