UTI is one of the pioneers of the Indian Mutual Fund Industry. With over Rs 2.4 Lakh crore, the AMC is among the most trusted names in the mutual fund space. The UTI Mutual Fund offers products across asset classes.
UTI Arbitrage Fund
Investment Objective
The scheme aims to generate capital appreciation through arbitrage opportunities between cash and derivative market and arbitrage opportunities within the derivative segment and by deploying surplus cash in debt securities and money market instruments.
Investment Process
The fund follows a strategy to take advantage of the arbitrage opportunities arising from the price difference between the cash and derivative market.
The fund will endeavor to enhance returns through arbitrage between spot and futures equity markets. The fund manager will evaluate the difference between the price of a stock in the futures market and the spot market on a market-neutral basis.
The balance portion of the portfolio is invested in FDs, debt instruments, money market instruments, and/or units of debt funds of Mutual Funds
Portfolio composition
As a hybrid fund, the funds are allocated to Equity (Hedged), Commercial Papers, Government Securities, Certificate of Deposit, T-Bills, Treps, and NCA.
Source: UTIMF, Value Research
Top 5 Holdings
| Name | Sector | % |
| UTI Money Market Direct – Growth | Financial | 10.12 |
| ICICI Bank | Financial | 6.50 |
| Kotak Mahindra Bank | Financial | 5.46 |
| Reliance Industries | Energy | 4.91 |
| Ambuja Cements | Materials | 3.51 |
Source: UTIMF, Value Research
Performance since inception
The fund has generated a CAGR of 6.73% since inception for its regular plan as on 31st March 2023.
Date – 22nd June. 2006.
Source: UTIMF
UTI Hybrid Fund
Fund manager
Sharwan Kumar Goyal: Sharwan Goyal is Fund Manager and Head – Passive, Arbitrage, and Quant strategies at UTI AMC.
He is a CFA Charter holder from CFA Institute, USA, and holds a post-graduate degree in Management (MMS) from Welingkar Institute of Management, Mumbai.
He has over 16 years of experience in Risk Management, Equity Research, Portfolio Analysis, and Fund Management at UTI AMC.
Amit Sharma: Mr. Amit Sharma has been associated with UTI AMC for the past 13 yrs. He is a CA Charter holder and an FRM charter holder.
In UTI, he has worked in the Valuation team and is currently the Fund Manager of the UTI Overnight Fund, UTI Liquid Cash Plan, UTI Money Market Fund, and UTI Arbitrage Fund (Debt portion)
Who Should Invest?
- Investors looking to take advantage of the arbitrage opportunities in the equity markets
- Investors looking to invest on a medium-term basis without a directional exposure
Why Invest?
- A fully hedged portfolio eliminates the risk typically attached to directional Volatility management calls.
- The equity status of the fund lowers the incidence of capital gains tax.
- Low expense structure compared to peer average.
Horizon
- Ideal for investors with a time horizon of six months and above.
Conclusion
The equity portion of the fund’s portfolio is managed actively through strategies such as Fresh Arbitrage, Reverse Arbitrage, Churning, and Short Rolls.
In contrast, the debt portion is managed conservatively by investing in short-maturity and high-credit quality instruments. The fund has outperformed both benchmarks consistently.
Hence, investors looking for capital appreciation without aggressive risk can consider this fund.
Disclaimer
This is not recommendation advice. All information in this blog is for educational purposes only.
