July 22, 2024

UTI Mastershare Unit Scheme


Rs. 10 lakhs invested at the inception of fund has grown to Rs. 18.20 crores as of September 30, 2022

UTI Mastershare Unit Scheme is India’s first equity-oriented fund (launched in October 1986) and has a track record of wealth creation of over 35 years.

UTI Mastershare Unit Scheme is an open-ended equity scheme which predominantly aims to invest 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. This means that, given the underlying growth in earnings of a company, a reasonable price is to be paid to buy that stock in the portfolio.

The Fund aims to invest in companies that are fundamentally strong with controlled borrowings, consistent revenue growth, focus on profitability, higher return on capital than cost of capital and consistent operating cash-flows generation.  Such companies may generate free cash flows for future expansion and avoid dilution of existing shares.

Owing to this combined approach of GARP plus Competitive Franchise, UTI Mastershare Unit Scheme may invest in companies where,

  1. The market is underestimating the companies’ ability to sustain growth over the long term or the benefits of pricing power
  2. The growth trajectory is improving through industry wide phenomena like favourable demand cycle, consolidation, clearances of regulatory hurdles or through company specific factors like cost competitiveness and prudent capacity expansion
  3. The business is capital intensive but the companies invest prudently and execute efficiently
  4. The companies having opportunities to reinvest cash flows at high Return on Capital Employed (RoCE)
  5. The relative valuation within the sector is attractive

This provides the investors an opportunity to create a long-term wealth by owning a portfolio of quality companies.

UTI Mastershare Unit Scheme, being categorized as a Large Cap Fund, has a portfolio of leading companies such as ICICI Bank Ltd., Infosys Ltd., HDFC Ltd., Bharti Airtel Ltd., Reliance Industries Ltd., HDFC Bank Ltd., Axis Bank Ltd., Kotak Mahindra Bank Ltd., Tata Consultancy Services Ltd. and Larsen & Toubro Ltd. and the top 10 stocks account for about 46% of the portfolio. The Scheme is currently overweight on Automobile and Auto Components, Consumer Services, Telecommunication, Capital Goods and Consumer Durables and underweight on Oil, Gas & Consumable Fuels, FMCG, Metals & Mining, Power and Financial Services as of September 30, 2022.

The Fund has a corpus of over Rs. 10,394 crore with over 7.48 lakh live investor accounts as on September 30, 2022. The Fund aims at obtaining capital appreciation / or income distribution over a long-term, follows a disciplined approach to invest as stated above and has maintained a stream of annual dividends every year since its inception. UTI Mastershare Unit Scheme has distributed a total dividend of more than Rs. 4,200 crore.

The scheme has a lower portfolio churn. UTI Mastershare Unit Scheme has generated a return (CAGR) of 15.56% against the return of 14.20% by the benchmark S&P BSE 100 TRI since inception as on September 30, 2022. Furthermore, an investment amount of Rs. 10 lakhs made in the fund at its inception has grown to Rs. 18.20 crores as against Rs. 11.88 crores as per benchmark S&P BSE 100 TRI during the same period, i.e., generating around 182 times returns over the last 35 years.