UTI Opportunities Fund

The scheme seeks to generate capital appreciation and/ or income distribution by investing the funds of the scheme in equity shares and equity related instruments. The focus of the scheme is to capitalize on opportunities arising in the market by responding to the dynamically changing Indian economy by moving its investments amongst different sectors as prevailing trends change.

UTI Opportunities is one of the funds that over the last few years has been responsible for the turnaround in this fund houses' reputation as a good equity fund manager. The last five years has seen an average annual return of 27.6 per cent. While the fund has underperformed the benchmark in two of these years, these have been relatively small lags in years that have otherwise been strongly positive. In aggregate, the fund has outpaced the benchmark by 30 per cent, which is 5.25 per cent a year. On absolute performance, the fund has aggregated gains of 180 per cent in these five years, which is 23 per cent a year.

Moreover, these gains have come without any severe declines. The highpoint of this fund's recent history: it was well-positioned to take advantage of the strong post-May 2009 gains. Even better, it protected those gains well later. When the markets fell 25 per cent during 2011, the fund fell only 12 per cent. Over time, these are the kind of small victories that stack up to big gains by investors.

This relatively high-return and low-volatility behaviour shows superbly in its Value Research Star Ratings. At 32 months and counting, this fund has one of the longest unbroken five-star runs among all equity funds. And, in the last 57 months, it has had seven four-stars and 50 five stars.

What's the secret behind this track record? According to fund manager and UTI's Equity CIO Anoop Bhaskar, his short list generally consists of stocks that could surprise on earnings, those that have proven earnings growth better than their sectors, and proven core stocks with superior earnings. It's a stock-centric rather than a top down sector-centric or macro-driven approach.

One interesting point; the fund's large cap exposure has grown from the 60-70 per cent range in 2010-11 to the mid-80s now. On this trend, it may soon hit the limit at which we will have to reclassify it as a large-cap fund. Still, that's a technicality. It may change its peer set but the case for investing looks likely to remain intact.