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UTI - Dividend Yield Fund

Rating (source: Value Research)

NAV as on 17/04/2014 for

Rs. 13.8830.1835 (1.32%)

This product is suitable for investors who are seeking*:

  • Long term capital growth
  • Investment predominantly in high dividend yielding equity instruments
  • High risk  (Brown)

* Investors should consult their financial advisers if in doubt about whether the product is suitable for them.

Note: Risk may be represented as:

  • (BLUE) investors understand that
    their principal will be at low risk
  • (YELLOW) investors understand that
    their principal will be at medium risk
  • (BROWN) investors understand that
    their principal will be at high risk
SMS: LNF to 5676756to get scheme details and NAV
  • Overview

  • Performance

  • Portfolio

  • Fund
    Manager
  • Scheme
    Documents
  • Load
    Structure
  • Management
    Commentary
Investment Objective

Investment will be made in stocks of those companies engaged in the following areas:

  • The investment objective of the Scheme is to provide medium to long term capital gains and /or dividend distribution by investing predominantly in equity & equity related instruments,which offer high dividend yield. There can be no assurance that the investment objectives ofthe scheme will be realised
Investment Information
Fund type
Open Ended
Date of Inception
03/05/2005
Investment Plan
Income retail
Fund size (Rs.Cr)
2957.91 (as of 31st Mar 2014 )
Number of investors
478723 (as of 31st Mar 2014 )
Min. Investment
5000
Last Dividend
0.45
Bonus
N.A.
Options Available

Growth option, Dividend option with Payout and Reinvestment

(SIP, SWP & Trigger)

Fund Managers
Fund Manager

Mrs. Swati Kulkarni

Swati Kulkarni is Executive Vice President and Fund Manager – Equities at UTI AMC Ltd.

Know More
Who Should Invest
  1. A diviersified large-mid cap oriented fund with conservative-style of funds management is suitable for all equity investors
Portfolio (as of Mar 2014)

Sectoral Breakdown
(% as compared to Benchmark)

Market Capitalisation (%)

Large Mid Small
72.00 24.00 4.00

View complete asset allocation

Scenario 1:
Mr.Singh has invested Rs.1,00,000 in this fund since December 2000. See how his funds have performed over time.

Scenario 2:
Mr.Singh has invested Rs.1,00,000 in this fund since December 2000. See how his funds have performed over time.

Sectoral Breakdown (as of 31st Mar 2014)
Asset Allocation (as of 31st Mar 2014)

Market Capitalisation (%)

Large Mid Small
72.00 24.00 4.00
Detailed Portfolio (as of 31st Mar 2014)
Equity % to NAV
COAL INDIA LTD. 1.67
NTPC LTD. 1.71
OIL INDIA LTD. 1.77
GRASIM INDUSTRIES LTD. 2.02
PROCTER & GAMBLE HYGIENE & HEL CARE LTD. 1.58
CUMMINS INDIA LTD. 2.11
BHARAT ELECTRONICS LTD. 1.05
HDFC BANK LTD. 2.05
NIIT TECHNOLOGIES LTD. 1.44
CLARIANT CHEMICALS (INDIA) LTD. 1.21
BHARAT HEAVY ELECTRICALS LTD. 1.16
ZEE ENTERTAINMENT ENTERPRISES LTD. 1.07
OTH 12.59
NCA 7.33
LIC HOUSING FINANCE LTD. 2.08
AMBUJA CEMENTS LTD. 1.13
ICICI BANK LTD 5.99
INFOSYS LTD. 6.39
ITC LTD. 5.80
TATA CONSULTANCY SERVICES LTD. 5.50
OIL & NATURAL GAS CORPORATION LTD. 3.71
AXIS BANK LTD. 3.56
HERO MOTOCORP LTD. 3.39
WIPRO LTD. 3.31
BANK OF BARODA 3.05
STATE BANK OF INDIA 2.63
ACC LTD 2.44
AKZO NOBEL INDIA LTD. 2.39
GAIL (INDIA) LTD. 2.29
TATA CHEMICALS LTD. 2.27
GREAT EASTERN SHIPPING CO. LTD. 3.25
BHARAT PETROLEUM CORPORATION LTD. 2.06
Fund Manager - Biography
Fund Manager

Mrs. Swati Kulkarni

Swati Kulkarni is Executive Vice President and Fund Manager – Equities at UTI AMC Ltd.

After her graduation in Commerce, she went on to earn her Masters in Financial Management from Narsee Monjee Institute of Management Studies from University of Mumbai, where she also distinguished herself as a rank holder. Swati holds CFA charter conferred by CFA Institute, USA. She is also a Certified Associate of Indian Institute of Bankers (CAIIB).

Swati has a professional experience of 20 years, 19 years of which she has been with UTI AMC. She has been a Fund Manager since 2004. Earlier she was part of the Fund Management team involved in analyzing companies across sectors, while assisting the Fund Managers. She has handled Mutual Fund Research, Market Research, Product Reviews and Quantitative Analysis as part of the Research and Planning team at UTI. Her previous assignment was with Reliance Industries Ltd in the Financial Planning Cell.

Swati was recognised among the top three India’s Best Fund Managers in Equity category by Outlook Money in 2010.

Download Fund Documents
Minimum Investment Amount Rs. 5000/-
Period of Holding < 1 Year >= 1 Year
Entry Load Nil Nil
Exit Load(as % of NAV) 1% Nil
  • Market Overview
  • Portfolio Commentary
  • Going Forward
  • Performance

During the quarter ended Dec. 2013, broad market equity Indices of US, Japan and certain European countries returned 6 %to 10% in local currency. The Emerging markets and Asian markets by and large performed poorly registering a decline or modest increase barring India (7%), Argentina (11%), Israel (6.6%) and Egypt (16%).

Among the Indian Equities, the Mid Cap stocks outperformed large cap by wide margin; CNX Midcap index rose 13.7% as against 7% return of CNX Nifty 50; however it still underperformed the Nifty 50 on YTD, 1 and 3 year basis. FMCG and Healthcare sector which outperformed across time periods in last 5 years underperformed during the quarter. The sectors, which were consistently underperforming in the earlier quarters such as Capital Goods, Metal, Realty, PSU Banks outperformed by wide margin during the last quarter. IT and Automobile sector continued to outperform.

Earlier FOMC's decision to delay the taper of QE, surprised the market and the part of the rally could be explained as the anticipated liquidity pressure eased. Back home, the current account deficit situation and the pressure on the INR eased as the measures to control import and to attract USD inflows through FCNR B and ECB Swaps worked. There is a perception that India is better prepared to handle QE taper. The subsequent news flow on QE taper indicates that it is going to be data dependent (unemployment, inflation) and less disruptive.

Four important state election results went against Congress, further kindling the belief on "Modi Wave". There are a lot of expectations around the change at the centre and about the revival of investment cycle, post that. Status quo on the repo and reverse repo rates during the monetary policy review of Dec. 18 against the wide expectation of 25 bp hike, fuelled rally in banking and investment related sectors. The inflation at 7.5% remained stubborn mainly due to vegetable prices and fuel pass through. RBI has indicated that it will be open to act between the policy dates if inflation does not soften. The Index of Industrial Production has remained volatile (1% growth in FY 13) with print for Oct 13, at (-) 1.80%- Mining, Manufacturing de-grew, Capital goods grew on negative base of last month while consumer goods de-grew.

The Fund has an Overweight position in IT, Cement, Services and Media and Underweight position in Banks, Consumer, Pharmaceuticals, Auto and Energy. During the quarter the Fund benefited out of IT, Services and Ind. Mfg. OW and Consumer UW positions while OW on Cement and UW on Metals and Banks did not work in favour. The quarterly movement in sector allocation was as below.

Industry Dec-12 Mar-13 Jun-13 Sep-13 Dec-13
Financial Services 28.28% 27.11% 24.64% 20.14% 21.46%
IT 7.76% 11.42% 11.06% 17.16% 18.15%

Energy

11.75% 13.48% 12.84% 13.18% 13.09%
Consumer Goods 10.44% 12.58% 13.92% 12.61% 10.25%
Cement & Cement Products 9.25% 9.24% 8.55% 7.67% 6.23%

Automobile

5.97% 6.11% 5.54% 5.12% 4.95%

Active Overweight in stocks such as Glaxo Pharma, GE shipping, Oriental Bank of Commerce, Union Bank, Axis Bank, NIIT Tech and Zee Entertainment and underweight in HDFC, ITC, HUL and RIL contributed positively. However, OW on NTPC, Grasim, Bharat Electronics, and Akzo Nobel which can be termed 'value stocks', contributed negatively. Also out performance of low dividend yielding stocks that we do not hold such as Tech Mahindra, Maruti , L& T and Adani Enterprises hurt the Fund.

During the Quarter, we increased exposure to Federal Bank, Axis Bank, Cairn, and Bharat Forge and reduced exposure to SBI, ITC and Zee.

Our effort will be to look for companies that have High Dividend yield and are likely to benefit out of currency weakness and / or operating leverage and where valuation is in comfort zone.

We expect the economic growth to bottom out in FY 14. The economy recovery is likely to be above 5.5% for FY 2015, on the expectation of better Manufacturing and Services growth than in FY 14. The inflation however, is a structural issue and expectation will remain elevated. Fiscal deficit is likely to remain high. That leaves little or no scope for rate cuts till March 14 or in the first half of FY 15.

India remains vulnerable to crude oil price increase but likely supplies from Libya and Iran are expected to make this a very low probability event. CAD related pressures are likely to remain subdued post the fall in gold imports and expectation of range bound crude prices. CAD to GDP is expected to be lower at 2.7% vs 4.8% for FY 13. High fiscal deficit will limit the Government's ability to fuel development and the investment cycle is expected to turn up after 12 to 15 months.

Indian Equity valuations are at 13 times consensus BSE Sensex earnings for FY 15 which is at the lower end of the historic one year forward PE valuation band. Even if you assume that there could be downgrades to FY 15 earnings, the valuation will still be at the historical average levels.

On the belief that the economy is bottoming out and the valuation is supportive, we will remain fully invested at these levels though the central election in May 2014 remains the key event risk. We will maintain an overweight position in IT as the operational environment is improving. The PEG is about 1, but earnings growth can see upward revision on better revenue traction and on margin expansion in specific cases like Infosys and Wipro. Cement OW will continue as we expect that the capacity addition will be difficult given the limestone availability outside the current players and the cost of land acquisition. As demand for cement improves better operating leverage is expected with improvement in the capacity utilization from the current 75% levels, rendering the current EBITDA per ton levels to be the lowest. As for the Banking exposure, our bias is to stay underweight. For PSU banks the pace of bad assets will slow down but the credit cost may still remain high due to lower provisioning of past and lower recoveries. For Private banks, the asset quality slippages may gather pace as the project commissioning starts. However, corrections from hereon could be used to increase exposure to the sector as a proxy to revival in GDP growth. We prefer better capitalized PSU banks and retail private banks. This shift will be done by reducing consumer exposure.

To sum up, the preference for quality will still remain. We will add to stocks where the operating leverage benefits are available as also such stocks where the balance sheets are strong to take on the growth without equity dilution. We expect cyclical stocks to correct, post the quarterly results and RBI policy. We will use this opportunity to add certain of these stocks in the portfolio over the next few quarters, as the economy appears to be on course to bottoming out.

The Fund returned 8% during the quarter vs. 7.2% for S&P BSE 100 and 5.4% for CNX Dividend Opportunities Index.

Sector Movement (Selective)

Sector Up / Down compared to previous quarter position
Consumer non durables
Cement & cement products
Software

Stock Movement (Selective)

Stock Up / Down compared to previous quarter position
Axis Bank
ONGC
Bharat Forge Ltd, Cairn India,Federal Bank (New entry)
Zee entertainment
SBI
ITC Ltd
Ambuja Cement
Petronet LNG Ltd (Exited)
Marico Ltd (Exited)
Greaves Cotton Ltd (Exited)
Birla Corp Ltd (Exited)
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