What Strategies Are Followed By UTI Mid Cap Fund To Deliver High Returns?

A true to label mid-cap scheme, UTI Mid Cap Fund invests its 70% of corpus in mid-cap stocks, having a conservative style of fund management. Currently, the mid-cap stocks are going into correction, and in the last six months, the stocks of the category have fallen by 20-30%. The fall takes place because the shares which were running at a lot premium, approximately 70%. So now, investors are looking for investment in mid-cap as the market is getting better right now. So far, UTI Mid Cap has delivered the returns of 18.72% since its launch, i.e., since the year 2004. The further details of the fund’s portfolio and its returns have been provided below.

Essential Details About UTI Mid Cap Fund:

Merged with UTI Master Value Fund in the year 2014, currently, the fund is investing in 63 companies. The current AUM of the fund is Rs 4,036 Cr as on Jul 31, 2018, with an expense ratio of 2.35%. The average market capitalization of the fund is Rs 13,513.06 Cr as on Aug 23, 2018. This capital is invested on the basis of the bottom-up approach, retain its investment in growth and value companies.

The UTI Mid Cap has its major investment in the automobile, finance and banking, chemicals, FMCG, energy sectors majorly. Besides this, it is investing in several other sectors which makes the scheme enough diversified.

As per the fund manager, Mr Lalit Nambiar, the fund is taking calls in the top 10 stocks which have performed well in the past 2-3 quarters. Most of the holdings in the fund have outperformed the market handsomely and did not follow any sector stance. He witnesses the funds which have favourable risk-rewards profile and the energy to recover the prices in the long run.

Strategies Followed by UTI Mid Cap Fund (G)

As the general elections are on the calendar, the fund manager hopes that if BJP provides spectacular results this time also, then we could see the fierce rally in the market. He feels that mid-cap will face less downturn as Prime Minister Modi focuses on the industrial development of the country. So, the fund management team has kept an eagle eye on the upcoming elections.

At the same time, the fund manager of UTI Mid Cap Growth feels that the monsoon was good, but many areas of the country are also facing floods so the cycle could see a little upgrade in the December quarter. Therefore, he is putting high conviction bets on the companies that form the part of NIFTY Midcap and NIFTY 500 but not BSE Sensex.

If we see the returns of the fund, an investor who has invested the amount of Rs 1,000 monthly on SIP mode from Aug 01, 2008, then the total amount invested till Aug 01, 2018 would be Rs.1,21,000. The total amount he gets after the wealth creation on Aug 01, 2018 after 10 years of investment in the fund would be Rs 3,48,253. With the growth of approximately 16% in the past 10 years, the fund has beaten its benchmark, NIFTY Midcap 150 TRI as well as peers.

The compounded returns of uti mid cap fund for the past three, five, and seven years were 8.56%, 29.78% and 20.39%, respectively. These returns have beaten its benchmark and category’s average in five and seven years. While in 3 years, it has under performed, which shows that its long-term track record is healthy.

The fund manager, Mr Nambiar focuses on the companies who have management track record, good business model, and sustainability. This investment strategy of the fund manager and his team has given the fund a good long-term performance.

Mid-cap market correction rally is about to end, and investors are looking for investment in UTI Mid Cap Fund. Have a look at the brief of the fund provided in the article above.

Dishika is well-versed with the ups and downs of the financial market and has published articles on mutual fund and SIP. She is associated with MySIPonline.com, which is an AMFI registered mutual fund company.