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Money > Mutual funds > Fund File May 28, 2001 |
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UTI Master Index FundDhirendra Kumar
UTI Master Index fund, launched in June 1998 seeks to replicate the BSE-30 Sensitive Index. The fund available at NAV levies a 3 per cent exit load. UTI Master Index Fund passively tracks the BSE Sensex, with a proportionate investment in the 30 stocks as in the index. Thus, only in the event of the index undergoing a change, the set of companies in the fund will change.
There have been three changes in the Sensex constituents, since the launch of the fund. First in November 1998, when Arvind Mills, G E Shipping, IPCL and SAIL were eased out for inclusion of Castrol, Infosys Technologies, NIIT and Novartis. The second change was in April 2000, when IDBI, Indian Hotels, Tata Chem and Tata Power were excluded for Dr. Reddy's Laboratories, Reliance Petroleum, Satyam Computer and Zee Telefilms. And in January 2001, Cipla replaced Novartis (India).
Today, the 30-stocks in the Sensex are - ACC, Bajaj Auto, BHEL, BSES, Castrol, Cipla, Colgate, Dr. Reddy's, Glaxo, Grasim, Gujarat Ambuja Cements, Hindalco, Hindustan Lever, Hindustan Petroleum, ICICI, ITC, Infosys, Larsen & Toubro, Mahindra & Mahindra, MTNL, Nestle, NIIT, Ranbaxy Labs, Reliance, Reliance Petroleum, Satyam Computer, State Bank, Tata Engg, Tata Steel and Zee Telefilms.
On the positives, a Sensex tracker is well-diversified, large capitalisation equity vehicle enjoying highest liquidity in our market. Besides, more frequent changes in the Sensex constituents have reduced the risk of a laggard and an old leader still being part of the Sensex. Since a clearly spelled-out portfolio strategy missing for most of our actively managed funds, UTI Index Fund proves to be the only predictable portfolio you can own. However, an index fund by definition settles for being an average performer. Besides, a likely lower expense for an index fund still does not show in performance.
The Master Index fund has very closely tracked the Sensex. The fund is a good investment for long-term capital appreciation.
Source: Value Research
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