UTI Mastershare Unit Scheme is India’s first equity oriented fund (launched in October 1986) and having track record of wealth creation for over 30 years. UTI Mastershare Unit Scheme has a long standing track record of uninterrupted annual dividend distribution across all market cycles – be it bearish or bullish.
UTI Mastershare Unit Scheme, an open ended equity scheme predominantly invests in large cap companies having competitive advantage in their respective fields. It follows an investment style of Growth at Reasonable Price (GARP) for stock picking. That means, given the underlying growth in earnings of a company, how much is the reasonable price that one should pay to buy that stock in the portfolio. This approach gives it a framework to buy companies having future earnings growth as well as valuation comfort.
The competitive franchise that UTI Mastershare Unit Scheme looks for is built over a long period of time by companies that are fundamentally strong with control on borrowings, consistent revenue growth, focus on profitability and higher return on capital than cost of capital and consistent operating cash-flows generation. Such companies generate free cash flows for future expansion and avoid dilution of existing shareholders. Typically such companies enjoy pricing power for a long period of time.
This combined approach of GARP plus competitive franchise enables UTI Mastershare Unit Scheme to invest in companies where,
1. The market is underestimating the companies’ ability to sustain growth over much longer phase or the benefits of pricing power.
2. The growth trajectory is improving through industry wide phenomenon like favorable demand cycle, consolidation, clearances of regulatory hurdles or through the company specific factors like cost competitiveness, prudent capacity expansion.
3. The business is capital intensive but the companies invest prudently, execute efficiently and the relative valuation within the sector is attractive.
This in turn gives the investors a long term wealth creation opportunity with lower volatility, by owning a portfolio of quality companies.
UTI Mastershare Unit Scheme being categorized as Large Cap Fund, thus has a portfolio of leading well-known companies such as, HDFC Bank, Infosys, ICICI Bank, Tata Consultancy Services, ITC Ltd, Tech Mahindra, Indus Ind Bank, Larsen & Toubro Ltd, Maruti Suzuki India, Kotak Mahindra Bank etc.
Top 10 stocks account for over 48% of the portfolio. The Scheme is currently overweight on private sector banks, rural facing NBFC, IT, Industrial Manufacturing and underweight on Energy, Consumer, and Metals.
The Fund has a corpus of over Rs. 5,700 crore with over 5.57 lakh live investor accounts as on August 31, 2018. The Fund aims at securing capital appreciation / or income distribution over a long term, follows a disciplined approach to invest as stated above and has maintained stream of annual dividends every year since its inception. UTI Mastershare Unit Scheme has distributed a total dividend of more than Rs. 3,000 crore in last 15 years.
This style pure scheme maintained its large cap orientation above 80% in past and will maintain in future too. The scheme has been a steady performer and has lower volatility. On the basis of last one year performance it features among the top 25% of the schemes in the category. UTI Mastershare Unit Scheme has generated a return (CAGR) of 15.08% against benchmark S&P BSE 100 TRI return of 14.59% since inception as on August 31, 2018. Just to highlight, investment amount of Rs. 10 lakhs made in the fund at inception has grown to Rs. 8.82 crores as on August 31, 2018 as against Rs. 7.71 crores as per benchmark S&P BSE 100 TRI during the same period. The scheme has generated 88 times returns over the last 32 years.
The mid and small cap segments of Indian equity market are still quoting at expensive valuation. In such a scenario, it will be wiser on the part of investors to invest in UTI Mastershare Unit Scheme, India’s first equity mutual fund with 32 years of track record and having investments in quality large cap companies.
UTI Mastershare Unit Scheme is suitable for those equity investors who are looking to build “core equity portfolio” with relatively stable and sustainable performance from a large cap portfolio and also for such investors who would prefer regular dividends and capital appreciation over long term.
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