UTI is one of the pioneers of the Indian Mutual Fund Industry. With an AUM of more than 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 Nifty50 Equal Weight Index Fund
Investment Objective
The investment objective of the scheme is to provide returns that, before expenses, correspond to the total return of the securities as represented by the underlying index, which is Nifty50 Equal Weight TRI, subject to tracking error.
Investment Process
UTI Nifty50 Equal Weight Index Fund follows a passive style of investing; that is, it invests in all the companies forming part of the Nifty50 Equal Weight Index (the underlying index) in the same proportion of the underlying index to earn a return as much as the underlying index, before expenses.
Portfolio Composition
The scheme had invested 98.52% of its assets in equities, and the remaining were cash and cash equivalents as of June 30, 2023.
The scheme had significant exposure to financial services, followed by Automobile and Auto Components and Information Technology.
Source: UTIMF, Value Research
Top 5 Holdings
| Name | Sector | Weightage % |
| Sun Pharmaceuticals Industries Ltd. | Healthcare | 2.03% |
| Infosys Ltd. | Information Technology | 2.02% |
| Bajaj Auto Ltd. | Auto and Auto Components | 2.02% |
| Tata Motors Ltd. | Auto and Auto Components | 2.02% |
| JSW Steel Ltd. | Metals and Mining | 2.02% |
Source: UTIMF
Performance Since Inception
If you had invested 10,000 at the fund’s inception, it would now be valued at Rs. 10,242, whereas the benchmark (Nifty50 Equal Weight TRI) would have fetched Rs. 10,501.
Since the fund was launched just a month ago, monitoring how the fund tracks the underlying index in the long term will be essential.
Inception Date – June 07, 2023.
Source: utimf.com
Fund Manager
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.
Who Should Invest?
This product is suitable for investors who are seeking:
- Capital Growth in tune with Index returns.
- Passive investment in equity instruments comprised in Nifty50 Equal Weight TRI.
Why Invest?
- The index offers exposure to the Top 50 large companies on the NSE with equal weight (~ 2% to each stock) with quarterly rebalancing.
- The index aims to benefit from the growth opportunities across stocks/ sectors rather than just relying on the performance of a few heavy-weight stocks/sectors.
- The index represents smart and intelligent investing through “Auto Quarterly Rebalancing” and thus enables “Auto Profit Booking.”
Ideal Time Horizon
- Ideal for investment with a time horizon of, preferably, five years or above
- Investment through Systematic Investment Plan (SIP) may help in tackling the volatility of the broader equity market.
Conclusion
Investing by replicating Nifty50 Equal Weight TRI is a better approach to investing in large-cap companies. Historical data shows that the Nifty50 Equal Weight TRI has generated better returns than the Nifty 50 with lesser volatility.
Therefore, this scheme suits investors looking for a simple yet smart way of investing in the Top 50 companies. However, monitoring how efficiently the fund tracks the underlying index over the long term will be crucial.
Disclaimer
This is not recommendation advice. All information in this blog is for educational purposes only.
