Dec 10, 1999|
US-64 sinks teeth in IT pie
Unit Scheme -64 (US-64) has increased exposure to infotech (IT) sector to 18% of its total equity portfolio. With this UTI's cumulative IT exposure has touched US$ 1 bn in market value terms, making it the largest holder of IT stocks in the country. This was reported by a leading financial daily.
Unit Trust of India (UTI), with assets in excess of Rs 630 bn as on 30th September 1999, is India's largest mutual fund (MF). It accounts for over 70% of India's MF segment. US-64 (Rs 210 bn corpus in December 1999), its flagship scheme 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.
In all, UTI's equity schemes have IT exposure in excess of Rs 40 bn. US-64, alone has IT holdings worth Rs 25.7 bn. IT now accounts for 18% of US-64's equity portfolio, and 12% of total scheme portfolio.
As revealed by a leading business daily, UTI chairman, P S Subramanyam, remarked, 'We might have entered a bit late, but we have entered big.'
The chairman's statement aptly sums UTI's position after US-64's reserves turned negative last year. The fund came in for a lot of flak, more so with large exposure to public sector units (PSUs) and commodity stocks. But the scenario has changed dramatically with UTI hiring professional managers to take stock of the situation. The UTI management has decided to churn its portfolio more frequently and target key stocks in growth sectors (IT, pharma).
This is the only way for UTI to ensure that its investors stay invested and don't desert it for private sector MFs who have been performing exceedingly well. While UTI has entered IT stocks in a big way only now, private funds began investing in IT more than a year ago, with some smart funds (Kothari Pioneer) actually having launched exclusive IT-dedicated sectoral funds.
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