Launched about five years ago, UTI Opportunities Growth won the Morningstar India Large Cap award and has a long-term record. Fund manager Harsha Upadhyaya is as dynamic as the market. Edited excerpts:
The fund’s investment philosophy?
We capitalize on opportunities arising in the market. We respond to the dynamic Indian economy by moving investments among different sectors as trends change. The fund invests in promising sectors in a concentrated way.
Meticulous hedging: UTI AMC’s Harsha Upadhyaya. Abhijit Bhatlekar / Mint
Many mutual funds (MFs) missed the rally before the general election last May. The markets have been range-bound since September-October. How did you manage?
While negative news flow and panic was at its peak during the second half of FY09, the valuations looked attractive. The Indian economy was showing signs of resilience amid global turmoil. That is when we started deploying cash. The markets bottomed out in March 2009, and by then we were almost fully invested. So, we did not miss the subsequent rally. Sector calls helped in outperforming the benchmark. Some stock-specific investments in mid-caps also boosted performance.
Also See | UTI Opportunites (graphic)
How is your fund different?
The fund is based on sector rotation concept. While a sector-specific fund runs the risk of having concentrated investments, a diversified fund invests in various sectors. Sector rotation funds try to strike a balance by attempting to profit through timing an industry or an economic cycle. Investments are made in four or five sectors, which are expected to outperform the market. We focus on liquidity of stocks, which is higher for large-cap stocks. We extensively use derivatives to hedge against volatility and enhance returns.
Graphic by Yogesh Kumar / Mint