With a 10-year return of 8.18%, the fund has underperformed the category (10.2%) and has beaten the index (7.48%) by a slim margin. The fund has underperformed peers over the past decade.
UTI Long Term Equity Fund is in a transition phase, moving away from its earlier large-cap driven mandate to a higher mid-cap exposure. The fund's large-cap bias was the main reason why it under performed peers—which benefited from their higher mid-cap exposure. The fund has consolidated its portfolio from around 90 stocks in May 2016 to 63 now. This has also allowed it to take higher exposure in its top picks.
UTI Long Term Equity Fund sector positioning will now remain neutral vis-a-vis the index. Top stock picks continue to be mostly index heavyweights, but the fund managers are comfortable taking healthy active positions and stepping beyond the index a little. No longer a conservative offering, investors should wait to see if the fund is capable of executing its new approach.
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