Uti Growth Schemes Navs Will Improve

The growth schemes of Unit Trust of India (UTI) are witnessing an improvement in their net asset values as the overall sentiment in the market has witnessed an upswing. According to B G Daga, chief general manager in charge of secondary market operations, as the recovery in the capital market spreads across the board, net asset values of all UTI growth schemes will improve. The market has witnessed a positive sentiment for the past two weeks. The rise in the stock prices is spreading across the board which has certainly had an impact on the performance of our growth schemes. We have investments in stocks that are spread across the board. Portfolios of many our equity schemes have a broad pattern. It is not concentrated only in index stocks, he said.

 

According to statistics provided by UTI, as on April 1, 1998, Mastershare had a net asset value of Rs 22.43 as against Rs 21.58 on April 2, 1997. This is an increase of 11.35 per cent. MEP 1993 (NAV- Rs 17.15), MEP 94- (NAV - Rs 9.44) and MEP 96 (NAV - Rs 11.97) have also outperformed indices since April 1, 1997. However, other growth schemes like Master plus, UGS 2000 and 5000 and Mastergain have underperformed.

Daga believes that with an improvement in the market sentiment, things will look up. We are lining up various equity-linked growth schemes during the year. We are also planning certain sector-specific offshore funds. We hope that the improvement in sentiment in equity will rekindle the interest of the investor, he said.

UTI has already announced UGS 10000, a multinational companies sector specific fund. It has also announced the turnaround fund for investing in stocks which will indicate recovery. Daga emphasised that the focus for the time being will be on ensuring success of these schemes.

Brokers who seek orders from UTI say that there has been a significant change in the way the mutual fund behemoth trades in the market. They believe UTI has become market-savvy. Gone are those days when UTI used to place orders of only 5000 shares per broker on the panel and close the counter for the day. Today,. UTI does not hesitate to place an order for 25000 shares. They are also giving premiums on the price at which they buy shares, a dealer at a leading institutional brokerage commented.

Brokers say that UTI, with its cash and stock reserves, play a contrary role to the market trend.

We see UTI selling the stock when the market is in a bull phase, and buying when the market is at its low. This is possible only when you possess good cash and stock. They have now become very aggressive, another BSE broker said.