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.
Let us talk about the flagship product – UTI Transportation and Logistics Fund.
UTI Transportation and Logistics Fund
Investment Objective
The scheme aims to generate long-term capital appreciation by investing predominantly in equity and equity-related securities of companies engaged in the transportation and logistics sector.
Investment Process
The fund follows a bottom-up approach for stock picking in line with its investment objective of investing in companies engaged in transportation and logistics.
The fund focuses on companies having substantial earning quality, growth-oriented companies, and good companies in a transient weak operational phase. By virtue, the fund is highly risky due to its concentrated allocation.
Portfolio composition
The portfolio holds significant exposure in large-cap stocks at 72%, and significant sectoral exposure is to Automobile and Auto Components, which accounts for roughly three-fourths of the portfolio.
Source: UTIMF
Top 5 Holdings UTI Transportation & Logistics Fund
| Name | Sector | Weightage % |
| Maruti Suzuki India Ltd. | Automobile | 12.88 |
| Mahindra and Mahindra Ltd. | Automobile | 12.78 |
| Tata Motors Ltd. | Automobile | 10.48 |
| Eicher Motors Ltd. | Automobile | 9.69 |
| Bajaj Auto Ltd. | Automobile | 7.02 |
Source: UTIMF
Performance Since Inception
If you had invested 10,000 at the fund’s inception, it would now be valued at Rs. 98,237, whereas the benchmark (Nifty Transportation and Logistics TRI) would have fetched Rs. 89,164.
Inception Date – 11th April 2008
Source: utimf.com
The fund has outperformed the benchmark. Investors have to be invested for a longer investment horizon to see the fund generating alpha.
Fund Manager
Mr. Sachin Trivedi ably manages the fund. Mr. Sachin Trivedi is Senior Vice President and designated Head of Research & Fund Manager, Equity at UTI AMC Ltd.
He is a B.com graduate from Narsee Monjee College of Commerce, Mumbai, and holds a post-graduate degree in management (MMS) from the K. J. Somaiya Institute of Management Studies & Research, Mumbai University. He also holds a CFA charter since 2004 conferred on him by the CFA Institute, USA.
He began his career in June 2001 with UTI. Sachin has 16 years of experience in research and portfolio management. In research, he has specialized in Auto OEM, Utilities, Capital Goods, and Logistics.
Who should invest?
Investors looking to
- Increase the risk spectrum with exposure to a thematic portfolio by investing in stocks of companies catering to the transportation and logistics sector
- Have a tactical allocation to their overall equity portfolio
- Increase the risk spectrum of their portfolio with exposure to a sectoral philosophy
Why invest?
- The fund’s endeavor to benefit from growing income levels, increasing aspirations, and also led by low vehicle penetration in India, relative to similar economies, is a signal for an uptick in future demand and would be a positive factor for the sector.
- The fund would be agnostic to the market capitalization spectrum and may take concentrated exposure to specific stocks, therefore, endeavoring to benefit from their underlying growth.
- The fund is ideal for a tactical allocation, with relatively better return potential than the diversified equity funds.
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
The UTI Transportation and Logistics Fund has delivered consistent returns in the long run.
Investors seeking a high return by taking aggressive risks with a bias towards the logistics and transportation sector can consider this fund for a long-term time horizon.
Disclaimer
This is not recommendation advice. All information in this blog is for educational purposes only.
