UTI Balanced Fund..
The investor’s preference
for different asset class keeps shifting based on market actions. Some time
investors may be overexposed or underexposed to a particular asset class
leaving the portfolio open to market’s unpredictability. Therefore it is
important to balance it out to keep one’s portfolio well allocated among debt,
equity and other asset classes.
This is where Balanced Funds
come into the picture. Investors looking to strike a balance between safety and
capital appreciation in the face of ever-changing debt / equity market
scenarios would find this as an appropriate investment option.
Fund’s Investment philosophy..
Launched in 1995, UTI
Balanced Fund is a key offering in balanced category. The fund maintains equity
- debt allocation in the range of 40%-75% and 25% - 60% respectively. The fund
aims regular income together with capital appreciation by following a
disciplined and balanced approach to asset allocation.
The fund is managed with
an equity tilt and the entire alpha is generated out of equity portion. The
debt is managed on a conservative basis and is invested mostly in long term
corporate bonds.
Avoid taking
allocation calls between equity and debt unless there are very strong signals
of equity underperforming by a wide margin. Historically, the equity is closer
to the maximum level of 75% while in debt segment the fund focuses on corporate
bonds of maturity of two to three year.
On a tactical basis, the fund takes
exposure in G-Sec to the extent of 20 to 30% of the debt portfolio in case of
fund house’s view is bullish on G-secs. Currently the fund has around
68% weight in large caps and balance in mid and small caps and would aim to maintain
this weight.
The fund would strive to derive alpha from the investments in mid
and small caps. In terms of mid caps, the major sectors where the fund is
invested are textiles, logistics and real estate.
Why
UTI MF Balanced Fund?
·
20 years track record - The fund has 20
year plus track record in industry. The fund has outperformed its benchmark
(Crisil Balanced Fund Index) on various time periods including 5 years. The
fund has generated a return of 16.39% on (CAGR basis as on Mar 2015) since its
inception.
·
High quality portfolio mix - The fund’s
portfolio consists of companies with good return potential, good return ratio
and strong track of corporate governance. The debt segment focuses on AAA / AA+
rated securities with a focus on minimizing credit risk.
·
Tax Advantage - The fund having exposure
in excess of 65% and above enjoys the tax advantage applicable to an equity
scheme. The dividend distributed is tax free and there is no long term capital
gains tax.
·
Dividend Distribution Track record - The
fund maintains a good dividend distribution track record. The fund has declared
regular dividend since 2003 (except 2013). This financial year (2014-15) the
fund has declared 2 dividends under its Regular Plan.
Funds
Suitability
The
fund is suitable for those who are looking to diversify their portfolio and
build long term wealth. Investors looking for equity returns with a limited
risk preference will also find this appropriate.
This product is suitable for investors who are seeking*:
- Long term capital growth
- Investment in equity instruments (maximum-75%) and fixed income securities (debt and money market securities)
- High risk (Brown)
* Investors should consult their financial advisers if in doubt about whether the product is suitable for them.
Note: Risk may be represented as:
- (BLUE) investors understand that
their principal will be at low risk - (YELLOW) investors understand that
their principal will be at medium risk - (BROWN) investors understand that
their principal will be at high risk
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