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UTI Equity Opportunity Fund

Dhirendra Kumar

Unit Trust of India's Equity Opportunity Fund (EOF) is a five-year, closed-end fund due for redemption in June 2001. The fund seeks to invest at least 80 per cent of its corpus in equities. Though listed, the fund is rarely traded. The fund also provides repurchase at a 5 per cent discount to the net asset value. The fund has not paid any dividend in its tenure.

Since its launch, EOF has given an annualised return of 12.20 per cent against 7 per cent by Nifty Total Return Index. Launched in a bearish market, EOF remained below par for a long period of time except for intermittent bull phases when the fund reared its head marginally above Rs 10. The fund remained invested in its initial picks of large-cap cyclical stocks for a long period, which took the plunge in the bearish markets.

The restructuring in favour of growth stocks in the second half of 1998 helped the fund register sharp gains in the buoyant markets with the NAV rising by 104 per cent in calendar 1999. As on December 1999, the fund had concentrated bets with technology stocks accounting for 35 per cent of the portfolio and another 30 per cent in fast moving consumer goods (FMCG) and pharmaceutical stocks.

However, as on March 31, 2000, the fund went overboard on technology stocks to the extent of 60 per cent of the net assets. With its increased allocation, the fund zoomed 55 per cent till March 7, 2000, after which it lost a massive 51.4 per cent in the subsequent downslide.

UTI Equity Opportunity Fund has a quality portfolio poised for rapid growth with the small size to its advantage. However, its stock and sector concentration will keep it volatile.

Fund Basics
Objective	Size (Cr)	NAV: 21/7/2000	Mkt. Price	Prem./Disc.	Total Returns (%)
Growth	21.43	15.96	-	-	12.20%
Benchmark Comparisons (%)					30/6/2000
	1M	3M	6M	1Yr	3Yr
Fund	12.3	-18.4	-3.6	55.4	16.3
Nifty Tot. Ret.	6.7	-3.1	0.2	29.0	8.8
Sensex	7.1	-5.0	-5.1	14.7	3.7
Obj Avg	7.5	-10.5	-4.5	34.8	9.9
Top Holdings (31/3/2000)					Net assets (%)
Global Telesystems					11.39
Infosys Technologies					10.18
I.T.C.					7.71
MTNL					6.72
Satyam Computer					6.33
HCL Technologies					5.97
Zee Telefilms					5.84
Cadbury					4.96
HLL					4.95
Rolta					4.92
Himachal Futuristic					4.84
SSI					3.75

Source: Value Research

Fund File

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