Oct 13, 1999|
US-64 investors get some good news...at last
Unit Trust of India's (UTI) US-64 net asset value (NAV) has appreciated by 24% to Rs 12.90 (on September 30) from Rs 10.40 on June 30, 1999. This was reported by a leading business daily.
UTI, with assets in excess of Rs 601 bn as on 31st August 1999, is India's largest mutual fund (MF). It accounts for 76% of India's MF segment. UTI commenced operations in 1964, with the launch of Unit Scheme 1964 (US-64), its flagship scheme. US-64 garnered approximately Rs 250 m in that year, and currently manages assets in excess of Rs 170 bn, which is larger than a few private mutual funds put together! Therefore US-64's buying and selling operations have a significant impact on Indian stock markets.
US-64's NAV rise is attributed to the recent surge in the BSE Sensex. (8 out of the 10 top stocks in US-64's portfolio are Sensex stocks). The appreciation in the NAV has narrowed down the gap between the US-64 NAV and repurchase price to just 7% from around 29% in June 30.
Last year, after the decline in market value of its investments had eroded its capital, US-64 had undertaken a portfolio restructuring exercise. It more than tripled its investments in fast-moving consumer goods (FMCG), information technology (IT) and pharma, (the golden triangle) sectors. Exposure in these three sectors has increased from 7.9% of net assets in June 1998 to 25% of net assets in June 1999.
As expected by market analysts, investments in the golden triangle have come at the expense of PSU stocks, which have been transferred to Special Unit Scheme-99.
However, assuming that US-64 portfolio has not changed since June 30, the current market value of the top 25 scrips seems to be lagging behind the Sensex. It appreciated only 19.2% over June-September 1999, while the Sensex has risen by 22%.
As disclosed by the UTI chairman, P S Subramanyam, US-64's sale/repurchase price will be aligned to its NAV before the three-year time-frame stipulated by the Deepak Parekh committee.
More Views on News
Mar 10, 2016
An opportunity to find an impeccably trustworthy and competent financial guardian is in the offing.
Feb 29, 2016
Most financial planners come out as whiz kids who throw around financial jargon. But financial planning can be actually easy, provided one follows a disciplined approach.
Feb 12, 2016
PersonalFN highlights the benefits of parking a portion of your expenses in e-wallets and using them efficiently.
Feb 2, 2016
Mutual funds take a bearish call on the FMCG sector. The sector has started playing out due to a combination of slower growth and expensive valuations.
Feb 1, 2016
Ethical practices help build long lasting relationships, and healthy long-term business relationships are often mutually rewarding. But PersonalFN is of the view that the financial services industry in India seems to have forgotten this.
More Views on News
Aug 17, 2017
A small-cap Indian company with high-return potential and blue-chip-like stability is set to supplant the Chinese players in this niche segment.
Aug 10, 2017
Bill connects the dots...between money and growth, real money and real resources, gold and cryptocurrencies...and between gold, cryptocurrencies, and time.
Aug 16, 2017
The IT Sector could be in an uptrend till February 2019. Are you prepared to ride the trend?
Aug 10, 2017
Bitcoin hits an all-time high, is there more upside left?
Aug 16, 2017
Ensure your financial Independence, and pledge to start the journey towards financial freedom today!
Copyright © Equitymaster Agora Research Private Limited. All rights reserved.
Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement. LEGAL DISCLAIMER:
Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here
. The performance data quoted represents past performance and does not guarantee future results.SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.
Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: firstname.lastname@example.org. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407