UTI is one of the pioneers of the Indian Mutual Fund Industry. With a total AUM Rs 15.56 lakh crore the AMC is among the most trusted names in the mutual fund space. The UTI Mutual Fund offers products across asset classes.
Let us talk about the – UTI Dynamic Bond Fund.
About UTI Dynamic Bond Fund
Investment objective – The scheme’s primary objective is to generate optimal returns with adequate liquidity through active management of the portfolio, by investing in debt and money market instruments across duration.
Note: There is no assurance or guarantee that the investment objective of the scheme would be achieved.
Investment Process
The Fund aims to earn accrual income by investing its assets in debt instruments. It follows tactical allocation to invest among corporate debt, government securities (G-Sec), guided by the fixed income strategy of the fund manager.
Source: UTI MF
Portfolio Composition
Currently the dynamic bond fund allocation comprises 89.63% in debt fund and 10.36% in cash & cash equivalents.
Top 5 Holdings for UTI Dynamic Bond Fund
| Name | Sector | % |
| GOI Sec 7.10 08/04/2034 | GOI Securities | 41.88 |
| GOI Sec 7.18 24/07/2037 | GOI Securities | 21.80 |
| GOI Sec 7.37 23/10/2028 | GOI Securities | 8.82 |
| GOI Sec 7.18 14/08/2033 | GOI Securities | 8.75 |
| Power Finance Corporation Ltd SR 223 Debenture 7.64 22/02/2033 | Debenture | 4.40 |
Source: Value Research
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Performance Since Inception
| Period | UTI Dynamic Bond Fund (%) | CRISIL Dynamic Bond A-III Index (%) | CRISIL 10 Year Gilt Index (%) |
| 1 year | 6.17 | 6.37 | 6.24 |
| 3 years | 9.85 | 4.99 | 3.70 |
| 5 years | 6.90 | 7.42 | 6.04 |
| Since Inception | 7.70 | 7.86 | 6.22 |
Note: Fund performance since launch; Inception Date – 16th June.2010 to 30th April 2024. Returns are of direct plan.
Source: UTI MF
Fund Manager
The fund is managed by Mr. Sudhir Agarwal holds who holds a degree of M.com, PGDBA(Finance) and CFA charter from The CFA Institute, USA. He is Executive Vice President and Fund Manager – Fixed Income at UTI AMC Ltd. He joined UTI AMC in 2009 after 4 years of experience. He has been managing this scheme since December 2021 and has previously worked with CARE (Credit Analysis and Research Ltd.), Transparent Value LLC and Tata Asset Management Company Ltd in different roles. He is fund manager managing various debt schemes.
Who Should Invest?
- Investors looking to capitalize on interest rate movement along with reasonable returns and adequate liquidity.
- Investors seeking to do asset allocation across various asset classes.
- Investors who want to build their medium-term debt portfolio in an uncertain environment.
- Investors having a moderate risk appetite with short term investment horizon can explore this fund.
Why Invest?
- The fund dynamically manages duration by investing across the yield curve in response to the change in market environment.
- It maintains a diversified portfolio of bonds, debentures and government securities.
- It seeks to invest across different maturities and credit ratings to optimize returns with commensurate risk.
- The fund intends to maintain adequate liquidity through active management of the portfolio.
Time Horizon
- Investors with a time horizon of one to three years may consider this fund.
- Investment through Systematic Investment Plan (SIP) may help in tackling the volatility of the broader equity market.
Conclusion
UTI Dynamic Bond Fund has provided consistent higher annualised return than category average for the past 1 Year, 3 Years and 5 Years. The fund is having moderate risk so investors can explore this as an alternative to traditional instruments like fixed deposits for long term capital appreciation.
Disclaimer: This is not recommendation advice. All information in this blog is for educational purposes only.
