Intelligent investors need more than just investment worthy fund names. Starting today, we update on one fund from Mint 50 every week. Find risk, return and other basic data around a fund and interact with the fund manager in a live webchat every Wednesday. Excerpts from the chat with UTI Opportunities (Growth) Fund’s Harsha Upadhyaya
Navneet: What are the sectors you focus on?
Harsha: We are positive on banking, energy, information technology and auto sectors from a 12-month perspective.
Also See UTI Opportunities (Growth) Fund (Graphics)
Ragini: How much cash do you keep on average? Do you time the market using cash?
Harsha: We generally maintain the cash levels at less than 10% under normal circumstances. The year 2008 was an extraordinary phase in the market as global turmoil was coupled with high domestic inflation. In that scenario, on defensive considerations, the cash level was at an enhanced level for a short period.
Amar: Do you see any kind of top formation in the benchmark indices?
Harsha: The broad market is currently trading at around 15-16 times on one-year forward basis, which is in the middle range from the historical perspective. Given the expectations of strong earnings growth in FY11 as well as FY12, we may see decent returns going forward. Most of the FY11 earning estimates for the Sensex basket are 1,050-1,100. We are currently trading at 15-16 times on FY11 earnings basis.
Navneet: Where do cement and infrastructure stand?
Harsha: We continue to be positive on infrastructure from the long-term perspective as the country needs large investments in the sector to achieve sustained growth. At appropriate valuation, we would review our position in this sector. Cement continues to show strong growth, but we are selectively positive on cement stocks.