UTI MF – Equity Yatra - What Fund Managers do?

UTI MF – Equity Yatra is an initiative from one of the largest fund house of the country, covering over 51 cities pan India, about 15 equity experts are reaching out to more than 10,000 financial intermediaries in less than two weeks.

UTI MF – Equity Yatra is a platform to bring forth the concepts of “What Fund Managers do?” and also explain their approach to wealth creation, there by bringing about transparency about their investment processes. This yatra is also an effort of the fund house to increase its engagement with financial intermediaries and taking their relationship to a step higher. Some of the key concepts that were discussed are as follows:

Investment Philosophy:

UTI’s Investment Philosophy in a nutshell encompasses two approaches (a) on identifying companies that can self-sustain their growth and have the ability to invest at higher rates of returns typically called growth companies and (b) on identifying companies that experiences an improving trajectory and are bought at attractive valuations, typically addressed as value companies.

Research Process:

UTI having a qualified team of research analysts has laid a well-defined frame work in the process of identifying the companies. The two key that drive the framework are the concepts of Operating Cash Flow (OCF) & Return on Capital Employed (RoCE)/ Return of Equity (RoE). As highlighted based on these two concepts, the companies in the universe are categorized into 3 tiers on both the drivers. The various investment arguments and hypothesis are built on the above categorization of the companies.

Portfolio Construction:
At UTI, it is the Fund Manager who drives the process of portfolio construction under the guiding principles of the fund mandate, security & sector weights, market capitalization limits, monitoring of allocation to companies in the tiers and their individual investment approach.

Style Discipline:

Having a style discipline is as important as picking a right stock for a portfolio. Every fund manager has set a distinct investment strategy and the essence of ensuring style discipline is the monitoring of the parameters such as P/E, P/B, RoE, Weighted Average Market Cap etc., during all phases of the market, and same can be attributed to the fund’s distinct characteristics as explained though their flagship equity funds – packaged as “UTI Power of Three”.

The funds in this focus list included 

a) 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

b) UTI Equity Fund, an open ended equity scheme investing across large cap, mid cap, small cap stocks. The Fund is built around the three pillars of Quality, Growth & Valuation. “Quality” signifies the ability of a business to sustain high RoCE / RoE over a long period of time. “Growth” signifies long term secular growth for the business. “Valuation” is determined by consistency in cash flow generation. The Fund would follow growth strategy with bottom-up approach for stock picking, is agnostic to the market capitalization spectrum and 

c) UTI Value Opportunities Fund, a multi cap scheme investing across the market capitalization spectrum following the “Value” style of investment. The fund would follow the “barbell approach” for its stock picking, buy what the market underestimates - Growth or Cyclicality. Sector Selection & Market Capitalisation are flexible based on valuations.


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