Rs. 10 lakhs invested at the inception of fund has grown to Rs. 23.55 crores as of May 31, 2024
Bengaluru: UTI Large Cap Fund is India’s first equity-oriented fund (launched in October 1986) and has a track record of wealth creation of over 37 years.
UTI Large Cap Fund is an open-ended equity scheme which predominantly aims to invest in large cap companies having competitive advantage in their respective fields. It follows an investment style of Growth at Reasonable Price (GARP) for stock picking. This means that, given the underlying growth in earnings of a company, a reasonable price is to be paid to buy that stock in the portfolio.
The Fund aims to invest in companies that are fundamentally strong with controlled borrowings, consistent revenue growth, focus on profitability, higher return on capital than cost of capital and consistent operating cash-flows generation. Such companies may generate free cash flows for future expansion and avoid dilution of existing shares.
Owing to this combined approach of GARP plus Competitive Franchise, UTI Large Cap Fund may invest in companies where,
- The market is underestimating the companies’ ability to sustain growth over the long term or the benefits of pricing power
- The growth trajectory is improving through industry wide phenomena like favourable demand cycle, consolidation, clearances of regulatory hurdles or through company specific factors like cost competitiveness and prudent capacity expansion
- The business is capital intensive but the companies invest prudently and execute efficiently
- The companies having opportunities to reinvest cash flows at high Return on Capital Employed (RoCE)
- The relative valuation within the sector is attractive
This provides the investors an opportunity to create a long-term wealth by owning a portfolio of quality companies.
UTI Large Cap Fund has a portfolio of leading companies such as HDFC Bank Ltd., ICICI Bank Ltd., Infosys Ltd., Reliance Industries Ltd., Bharti Airtel Ltd., Avenue Supermarts Ltd., Bajaj Finance Ltd., Axis Bank Ltd., Kotak Mahindra Bank Ltd., and Tata Consultancy Services Ltd., and the top 10 stocks account for about 50% of the portfolio. The Scheme is currently overweight on Consumer Services, Information Technology, Telecommunication, Consumer Durables and Financial Services, and underweight on FMCG, Oil, Gas & Consumable Fuels, Metals & Mining, Construction and Chemicals as of May 31, 2024.
The Fund has a corpus of over Rs. 12,300 crore as on May 31, 2024. The Fund aims at obtaining capital appreciation / or income distribution over long-term, follows a disciplined approach to invest as stated above and has maintained a stream of annual dividends every year since its inception. UTI Large Cap Fund has distributed a total dividend of about Rs. 4,400 crore.
The scheme has a lower portfolio churn. UTI Large Cap Fund has generated a return (CAGR) of 15.61% against the return of 14.51% by the benchmark S&P BSE 100 TRI since inception as on May 31, 2024. Furthermore, an investment amount of Rs. 10 lakhs made in the fund at its inception has grown to Rs. 23.55 crores as against Rs. 16.42 crores as per benchmark S&P BSE 100 TRI during the same period, i.e., generating over 236 times returns over the last 37 years.