uti market outlook report...fiscal deficit: india’s fiscal deficit for apr-jul 2018 came in at rs....
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UTI Market Outlook Report
October 2018
Market Outlook Flow
Macro Economic View
Fixed Income Outlook
Equity Outlook
IMF projects 2018 global growth at 3.7% (20 bps lower than
Apr projection)
United States growth projection retained at 2.9% while 2019
growth reduced by 20bps
India’s GDP projection lowered by 10bps to 7.4% for 2019
IMF 2019 world GDP growth at 3.7% (20 bps lower)
− Among EMEs, growth prospects factor in trade wars, tighterfinancial conditions, geopolitical tensions, higher oil importbills
− Slower expansion in working-age populations andprojected lackluster productivity gains to imply lowermedium-term growth rates in advanced economies
Global Macros Growth: Cyclical upswing, structural change
Source: The International Monetary Fund, based on latest IMFdata available till September 30, 2018
IMF Growth Projections
3
3.7 3.7 3.7
2.4 2.42.1
6.5 6.5 6.3
0
1
2
3
4
5
6
7
2017 2018 2019
World output Advanced economies Emerging & developing Asia
Key Policy Rates:Rates inching up major economies
US FOMC hiked the funds target rate by 25 bps to 2.25% in Sep’18 policy. The FOMC pegs 1 more hike in 2018
Bank of Japan held its monetary policy steady as inflation is still far from targeted 2%. Deposit rate was retained at
-0.1%. BoJ announced more flexibility in its bond purchases, allowing a wider band for yield curve control policy
ECB’s monthly purchase under asset purchase program to continue at €30bn at least till Sep’18, lower to €15bn till
Dec’18 and stop thereafter
Bank of England held the policy rate at 0.75%. BoE held government bond purchases at £435bn and corporate
bond purchases at up to £10bn
Source: Bloomberg based on data available till Sep 30, 2018
4
Rat
es
(%)
-0.5
0
0.5
1
1.5
2
2.5
3
Jan
-09
May
-09
Sep
-09
Jan
-10
May
-10
Sep
-10
Jan
-11
May
-11
Sep
-11
Jan
-12
May
-12
Sep
-12
Jan
-13
May
-13
Sep
-13
Jan
-14
May
-14
Sep
-14
Jan
-15
May
-15
Sep
-15
Jan
-16
May
-16
Sep
-16
Jan
-17
May
-17
Sep
-17
Jan
-18
May
-18
Sep
-18
US UK ECB Canada Japan
-4
0
4
8
12
16J
un-1
2
Se
p-1
2
De
c-1
2
Ma
r-1
3
Ju
n-1
3
Se
p-1
3
De
c-1
3
Ma
r-1
4
Ju
n-1
4
Se
p-1
4
De
c-1
4
Ma
r-1
5
Ju
n-1
5
Se
p-1
5
De
c-1
5
Ma
r-1
6
Ju
n-1
6
Se
p-1
6
De
c-1
6
Ma
r-1
7
Ju
n-1
7
Se
p-1
7
De
c-1
7
Ma
r-1
8
Ju
n-1
8
GDP Agriculture Industry Services
Domestic Macro Growth:
Growth picks up, IIP steady
Growth: Demon & GST disruptions behind us
Q1FY19 growth reflects recuperation from the two economic shocks, viz. demonetization & GSTimplementation. Q1FY19 GVA at 8% and GDP at 8.2%
Nominal GDP (13.8%) indicated positive deflators, higher consumption and uptick in investments;however on the back of a wider net exports deficit
Government efforts towards capital spending, addressing supply side bottle necks, faster projectclearances, ease of doing business, various other institutional and operational reforms remainimperative
Jul IIP at 6.65% against 7% in Jun, owing to weak base
IIP growth (% yoy)
Source: CSO based on data available till Sep 30, 2018
Real GDP (activity wise)
Source: CSO based on data available till Sep 30, 2018
5
%%
Inflation:Lower due to base effect and moderation of food prices
Inflation: Headline to remain elevated
Aug CPI Inflation @ 3.7% came in lower than 4.2% in Jul; Core CPI came in lower at 5.9% v/s 6.3% in Jul
WPI for Aug at 4.5% vs 5.1% in Jul
CPI trajectory likely to trend higher in Q4FY19
Source: MOSPI, UTI MF, Office of Economic Advisor based on data available till Sep 30, 2018
6
CPI and Core CPI inflation (% YoY)
Source: MOSPI, UTI MF, Office of Economic Advisor based on data available till Sep 30, 2018
Inflation rates within RBI’s target trajectory
-2
0
2
4
6
8
10
Fe
b-1
6
Ma
r-1
6
Ap
r-16
Ma
y-1
6
Jun
-16
Jul-1
6
Au
g-1
6
Se
p-1
6
Oct-
16
Nov-1
6
Dec-1
6
Jan
-17
Fe
b-1
7
Ma
r-1
7
Ap
r-17
Ma
y-1
7
Jun
-17
Jul-1
7
Au
g-1
7
Se
p-1
7
Oct-
17
Nov-1
7
Dec-1
7
Jan
-18
Fe
b-1
8
Ma
r-1
8
Ap
r-18
Ma
y-1
8
Jun
-18
Jul-1
8
Au
g-1
8
(%)
YoY
Fuel Food
Fiscal Deficit:
India’s fiscal deficit for Apr-Jul 2018 came in at Rs. 5.40
lakh crore, or 86.5% of the budgeted target for FY19
against 92.4% a year earlier.
Some comfort
― Constrained expenditure trend
― Prudent expenditure mix – higher capital spending
Some concerns
― Lower run rate of direct tax collections and non tax
revenue
― Dismal disinvestment
― Higher MSP to add to fiscal costs
Twin Deficits:Fiscal & Current Account
YTDFY19
(Rs Bn)
% of
FY19BE
YTDFY18
(Rs Bn)
% of
FY18
Revenue Receipt 3,357 19.5 2,910 19.3
Tax (net) 2,926 19.8 2,579 20.3
Non tax 431 17.6 331 14.0
Capital Receipt 137 14.9 125 10.6
Recovery of loans 45 37.0 42 23.9
Others 92 11.5 83 8.3
Total Receipt 3,495 19.2 3,035 18.7
Total Expenditure 8,897 36.4 8,084 36.5
T-Revenue 7,784 36.3 7,133 36.7
T-Capital 1,113 37.1 951 34.9
Fiscal Surplus/(Deficit) (5,403) 86.5 (5,049) 84.9
Source: CGA based on data available till September 30, 2018
7
(60)
(40)
(20)
-
20
40
Q1
FY
10
Q3
FY
10
Q1
FY
11
Q3
FY
11
Q1
FY
12
Q3
FY
12
Q1
FY
13
Q3
FY
13
Q1
FY
14
Q3
FY
14
Q1
FY
15
Q3
FY
15
Q1
FY
16
Q3
FY
16
Q1
FY
17
Q3
FY
17
Q1
FY
18
Q3
FY
18
Q1
FY
19
Invisibles Trade balance Current account
USD bn
Current Account Deficit: External balances to
deteriorate in FY19
Twin Deficits:Fiscal & Current Account
Current Account
Q1FY19 CAD at 2.4% of GDP vs 1.9% in Q4FY18.
FX reserves dip by USD 11.3 bn in Q1FY19
FY19 CAD to widen; overall external balances havemade INR weaker in FY19
India’s trade deficit narrowed in August to $17.39billion from $18.02 billion in July’18 on back of risingexports
USD
Bn
Trade Balance (USD Bn)
USD
Bn
Source: Bloomberg based on data available till Sep 30, 2018
Source: GoI based on data available till Sep 30, 2018
8
Domestic Macro Drivers:Favorable trajectory
Key Factors Where is it placed currently? Outlook
GVA Growth Cyclical growth recovery
Inflation Headed Northwards
Fiscal deficit Tight Walk
Rates/RBI Policy Stable & focused
Current Account to GDP
Nearing threshold levels
Indian Economy has achieved significant progress in its macro,which will support the growth for many years to come
GVA Growth (%)
6.6
3.9 10.3
Low High
Inflation (%)
5
1.9 11.4
Low High
Fiscal Deficit (%)
3.5
2.5 6.5
Low High
Current Account to GDP (%)
1.9
-4.8 2.4Low High
Repo Rate (%)
6.5
4.5 9.0
Low High
Macro-economic variables data from 2002-2017. Source: MOSPI, MOSL, Bloomberg Current data as of: GVA, CA to GDP, Fiscal deficit are for FY18, Inflation as on Jun’18 & Repo Rate – Aug’18
%
9
2018-19: Macro vulnerabilities amidst recovery
Growth recovery shaping up post demonetization and GST implementation
― FY19 growth numbers on an uptrend (GDP pegged at 7.3%)
Inflation: Rising price pressures ahead
― FY19 to mark average inflation of ~4.5%
Fiscal consolidation difficult ahead of an election year
― Center’s slippage evident: revised FD/GDP target of 3.5% for FY18 and 3.3% for FY19
― State finances comforted by share of GST from Centre
Current account deficit expected above 2.8% of GDP
― Higher import bill and capital flow vulnerability add headwinds to CAD comfort
Reforms implementation to augur well for medium term macro :
― Bankruptcy code, GST passed; supply-side reforms imperative
Long term drivers intact:
― Targeting lower inflation, increasing disposable incomes and rise of the middle class generate demandpotential
― India’s relative attractiveness in the EME basket
― Diversified trade destinations to Asia & the Middle East leading to less trade dependence on developedworld
11
Fixed Income Outlook
Indian 10 Year G-Sec:
Yields trending up again
Source: Bloomberg & RBI12
The 10 year benchmark G-Sec, the 7.17% 2028 GS yields closed at 8.03% on last day of Sep’18
Factors impacting yields:
Negative factors
― Rising US treasury yields
― Volatile crude oil prices
― Strengthening USD leading to depreciation in INR
― Default of an NBFC
6.0
6.5
7.0
7.5
8.0
8.5
5.8
6.3
6.8
7.3
7.8
8.3
Jan-15 Apr-15 Aug-15 Dec-15 Mar-16 Jul-16 Nov-16 Mar-17 Jun-17 Oct-17 Feb-18 May-18 Sep-18
10
Yr G
sec (%
)
Re
po
(%
)
Repo Rate (LHS) 10 year G-sec Yield (RHS)
Positive factors
― OMO announcement by government
― Reduction in government’s borrowing calendar
Yield Curve Yields have moved higher across shorter end of the curve over the last few months
13 Source: CCIL
• The above graph shows the movement of yields across different maturities
• Short term as well as long term yields have moved up in month of Sep’18 from Jul’18
5.80
6.10
6.40
6.70
7.00
7.30
7.60
7.90
8.20
8.50
8.80
0 1 2 3 4 5 6 7 8 9 10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
Ze
ro C
ou
po
n R
ate
(%
)
Tenor (In Yrs)
Movement of Zero Coupon Yields
31/Jul/18 28/Sep/18
14
Domestic Debt Market IndicatorsSoftening seen in the month gone by
Source: Bloomberg, Data as on last day of the above mentioned months
7.2
8.4
8.9
7.3
8.48.8
7.7
8.79.1
6.00
6.50
7.00
7.50
8.00
8.50
9.00
9.50
Tbill AAA AA
1 Year Rates (%)
Jul-18 Aug-18 Sep-18
7.9
8.7
9.1
8.0
8.7
9.2
8.1
8.9
9.4
6.00
6.50
7.00
7.50
8.00
8.50
9.00
9.50
10.00
G-sec AAA AA
5 Year Rates (%)
Jul-18 Aug-18 Sep-18
7.7
8.5
9.0
7.8
8.6
9.1
8.0
8.7
9.2
7.00
7.50
8.00
8.50
9.00
9.50
G-sec AAA AA
3 Year Rates (%)
Jul-18 Aug-18 Sep-18
7.8
8.7
9.2
8.0
8.8
9.3
8.0
8.9
9.4
6.00
6.50
7.00
7.50
8.00
8.50
9.00
9.50
10.00
G-sec AAA AA
10 Year Rates (%)
Jul-18 Aug-18 Sep-18
YTD Data till Sep 2018Data Source: ICRA MFI Explorer
BnUSD
Calendar Year
15
Fund Flows:FPI/ FII Inflow and Debt MF Inflow trend
2.4 1.4
10.4 7.9 6.4
-8.2
25.0
6.7
-6.2
23.3
-6.6
10.2
42.4 43.6
55.0
82.876.5
98.5
65.5
46.6
59.5
25.3
-20
0
20
40
60
80
100
120
FII/FPI flows Debt MF flows
RBI’s 4th Bi-monthly Monetary Policy 2018-19
Key Takeaways
To the surprise of market participants,
RBI holds repo rates at 6.50%
Kept the policy Repo Rate under the Liquidity Adjustment Facility (LAF) unchanged
at 6.5%
Consequently, the reverse repo rate under the LAF stands at 6.25%, and the
marginal standing facility(MSF) rate and the Bank Rate at 6.75%.
Key Rates (%) Oct 5, 2018 Oct 4, 2018
Repo No change 6.50
Reverse Repo No change 6.25
Cash Reserve Ratio (CRR) No change No change
Statutory Liquidity Ratio (SLR) No change No change
Marginal Standing Facility (MSF) No change 6.75
Bank Rate No change 6.75
10-Year G-Sec 8.02 8.16
Source: Bloomberg
CPI INFLATION
CPI projection to 3.9-4.5% in H2FY19 (from
4.8% in Aug policy) & 4.8% in Q1FY20 from
5% projected in Aug
Inflation projections factor in:• Recent softening in food prices• Excise duty cut• Volatile crude oil prices• MSP Implementation• INR Depreciation• Possibility of fiscal slippage• Global market uncertainties
GROWTH
FY19 GDP projection retained at 7.4% and reduced 10
bps to 7.4% for Q1FY20
Positives:
• Strong private consumption
• Improved capacity utilization
• Large FDI inflows
• Increased financing resources for the corporate sector
Downside risks:
• Tight global and domestic financial conditions
• Higher input costs implying lower margins and
discouraging investments
• Slowdown in global trade amidst escalating tariff wars
16
We continue to believe that the underlying theme will be to focus on capital preservation and
reasonable income accrual based on the evolving domestic & global macroeconomic environment
In such a scenario, funds having a combination of higher income accrual and short to medium term
duration would provide a good investment opportunity for the investors
Fixed Income:Current Market Outlook
17
Bond yields continued with their rising trend surging to its highest level in nearly four years following increase inglobal crude oil prices. Market sentiment was dampened after the rupee plunged to a record low against thegreenback
However, losses began to reversed due to certain factors viz. news that PM may review the nation’s economicsituation, RBI’s OMO announcement and reduction in government’s borrowing calendar
However, the INR bore the brunt of the policy by falling to below Rs. 74 to the USD for the first time on record brieflyafter the policy announcement. . By day end currency recovered from the record low and closed at Rs. 73.76 tothe dollar.
The 4th bi-monthly policy by RBI came as a surprise for market participants when the repo rate was unchanged andthe stance was changed to calibrated tightening. Bond markets reacted positively with yields dropping by 14 bpsand closing at 8.02%
We expect the 10 year benchmark 7.17% GS 2028 yields to be in range of 7.80% to 8.15% levels over the near term.We continue to expect two more rate hikes by RBI though timing of them is uncertain. Going forward marketswould closely watch RBI’s intervention in the forex market, liquidity measures, tackling of the IL&FS situation and
global cues ranging from crude oil to movement in US treasuries for further direction
Equity Outlook
Data Source : Bloomberg
YoY
%gr
ow
th
Timeline
There is significant headroom for credit growth
Bank Credit Growth:Slight improving trend
19
13.5%
0
5
10
15
20
25
30
35
40
Commercial Credit Growth
Data Source : MOSL LPA: Long Period Average
S&
P B
SE S
en
sex E
BIT
DA
ma
rgin
s in
%
EBITDA Margin expansion driven by lower raw material costs has run
its course, still scope for operating leverage
Timeline
Corporate Profits:Margins are quite healthy
20
28.3
28.0
30.3
28.5
26.1
26.226.2
24.4
25.2
24.0
23.6
22.7
24.6
23.6
24.124.3
24.6
24.8 24.7
21.6
22.5
22.5
20.7
21.6
20.920.4
20.9
21.7
20.821.0
22.0
22.9
22.321.8
22.2
23.6
24.5
22.8
24.4
27.0
27.7
26.0
26.6
26.6
25.8
27.8
27.5
27.5
26.527.2
27.5
27.5
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19
Sensex Margin LPA: 24.5%
Data Source: MOSL; The vertical axis is on a logarithmic scale S&P BSE Sensex, EPS: Earnings per share. CAGR: Compound annual growth rate
S&
P B
SE S
en
sex E
PS
Timeline
Earnings Trend:Likely Acceleration
21
91
81
129 181 250
266
291
278
280
216
236
272 361
446
540 720
833
820
834
1024
1109
1179
1334
1347
1330
1347
1379
1674
2170
Ma
r-92
Ma
r-93
Ma
r-94
Ma
r-95
Ma
r-96
Ma
r-97
Ma
r-98
Ma
r-99
Ma
r-00
Ma
r-01
Ma
r-02
Ma
r-03
Ma
r-04
Ma
r-05
Ma
r-06
Ma
r-07
Ma
r-08
Ma
r-09
Ma
r-10
Ma
r-11
Ma
r-12
Ma
r-13
Ma
r-14
Ma
r-15
Ma
r-16
Ma
r-17
Ma
r-18
Ma
r-19
E
Ma
r-20
E
S&P BSE Sensex EPS Trend
21% 30%2%
-2% CAGR
Earnings growth recovery is essential for valuations to sustain
Data Source: Bloomberg P/E” Price to Earnings Ratio, Avg: Average, std dev: Standard Deviation, Data as of 22nd Oct, 2018
S&
P B
SE S
en
sex t
raili
ng
PE
Valuations:In the upper reaches
Timeline
P/E - FAIRLY VALUED
P/E - EXPENSIVE
P/E - CHEAP
8
10
12
14
16
18
20
22
24
26
28
P/E Average P/E +1 std dev -1 std dev
22.3
19.0
15.7
20.9
2222
Nifty 50 premium over Nifty Midcap Index (Forward P/E )
23
5%
3%
-40%
-30%
-20%
-10%
0%
10%
20%
30%
40%
50%
60%
Nifty 50 premium over Nifty Midcap Index (Forward P/E )
23 Data Source: Bloomberg, Data as of 22nd Oct, 2018
Equity Mutual Fund Inflows include Arbitrage Funds, Equity Mutual Fund Inflows in CY 2018 till Sep 2018Data Source: AMFI. Mutual Funds (Equity & ELSS Schemes)FII (Foreign Institutional Investors)
Fund Flows:FPI/ FII Inflow and Equity MF Inflow trend
BnUSD
Calendar Year
24
18.5
-12.9
17.6
29.3
-0.5
24.5
19.8
16.2
3.3 2.9
8.0
-2.0
6.47.8
0.3
-3.1
1.6
-2.9-1.8
8.0
13.6
7.8
22.8
15.7
-15
-10
-5
0
5
10
15
20
25
30
FPI/ FII Inflow Equity MF Inflow
Performance is in local currency (Annualised)
Sorted on 1 Year Returns
2525Data Source : Bloomberg
CAGR: Compound annual growth rate
Performance (CARG %) as on 30/09/2018
Global Markets
25
Indices Country CY 18 - YTD 1 Year 3 Years 5 Years
NIKKEI 225 JAPAN 6% 18% 12% 11%
DOW JONES INDUS. AVG US 7% 18% 18% 12%
NIFTY 50 INDIA 4% 12% 11% 14%
S&P/ASX 200 INDEX AUSTRALIA 2% 9% 7% 4%
BRAZIL IBOVESPA INDEX BRAZIL 4% 7% 21% 9%
RUSSIAN RTS INDEX RUSSIA 3% 5% 15% -3%
CAC 40 INDEX FRANCE 3% 3% 7% 6%
FTSE 100 INDEX UK -2% 2% 7% 3%
JAKARTA COMPOSITE INDEX INDONESIA -6% 1% 12% 7%
HANG SENG INDEX HONGKONG -7% 1% 10% 4%
FTSE/JSE AFRICA ALL SHR SOUTHAFRICA -6% 0% 4% 5%
SWISS MARKET INDEX SWITZERLAND -3% -1% 2% 3%
DAX INDEX GERMANY -5% -5% 8% 7%
SHANGHAI SE COMPOSITE CHINA -15% -16% -3% 5%
Data Source : BloombergCAGR: Compound annual growth rate
Sorted on 1 Year ReturnsPerformance (CARG %) as on 30/09/2018
Top Sectors in last one year performance were IT, Energy and FMCG;
Realty, PSU Bank, Auto & Metals indices posted negative returns
Domestic Sector Performance
26
Indices CY 18 - YTD 1 Year 3 Years 5 Years
S&P BSE IT 39% 57% 11% 15%
S&P BSE Energy 11% 24% 26% 17%
S&P BSE FMCG 8% 18% 14% 12%
S&P BSE Healthcare 2% 11% -5% 10%
Nifty Bank -2% 4% 13% 21%
S&P BSE Oil & Gas -9% 0% 20% 13%
S&P BSE Cap Goods -11% 0% 4% 17%
S&P BSE Metal -11% -2% 25% 10%
S&P BSE Auto -20% -11% 7% 14%
Nifty PSU Bank -27% -11% -4% 5%
S&P BSE Realty -35% -18% 7% 8%
Equity Markets:Current Market Outlook
Global economic outlook is weaker due to rising trade tensions & weakness in emerging economies
High frequency indicators in India point to a growth acceleration being underway, but macro variablesturning adverse; except for inflation which remains in RBI target zone
Valuations (as of Oct 19) for the Sensex on a forward 12 month basis have dropped to the fair value zonefrom the expensive zone
Key benchmark indices like the Sensex have remained resilient, but this masks the broad & significantdamage to prices as you move down along the market cap curve
The consensus expectation for FY19 earnings growth is high and the earnings season would provide areality check
27
Only US equities, the US Dollar and Crude Oil have remained resilient
Product Positioning
Equity Category Schemes Benchmark (New)
Large Cap Fund UTI Mastershare Unit Scheme S&P BSE 100
Large & Mid Cap FundUTI Core Equity Fund
(Previously UTI Top 100 Fund)Nifty Large Midcap 250
Mid Cap Fund UTI Mid Cap Fund Nifty Midcap 150
Value Fund
UTI Value Opportunities Fund
(Previously UTI Opportunities Fund)
(Merging of UTI Multi Cap Fund)
S&P BSE 200
Multi Cap FundUTI Equity Fund
(Merging of UTI Bluechip Flexicap Fund)S&P BSE 200
Dividend Yield Fund UTI Dividend Yield Fund Nifty Dividend Opportunities 50
Thematic – Infrastructure UTI Infrastructure Fund Nifty Infrastructure
Thematic – MNC UTI MNC Fund Nifty MNC
Thematic – Lifestyle UTI India Lifestyle Fund Nifty India Consumption
Sectoral – Banking & FinancialUTI Banking & Financial Services Fund
(Previously UTI Banking Sector Fund)Nifty Financial Services
Sectoral – HealthcareUTI Healthcare Fund
(Previously UTI Pharma & Healthcare Fund)S&P BSE Healthcare
Sectoral – Auto UTI Transportation & Logistics Fund UTI Transportation & Logistics
ELSS UTI Long Term Equity Fund (Tax Saving) S&P BSE 200
Equity Funds Category
29
Debt Category Schemes Benchmark (New)
Overnight FundUTI Overnight Fund
(Previously UTI G Sec Fund STP)CRISIL CBLO
Liquid Fund UTI Liquid Cash Plan CRISIL Liquid Fund
Ultra Short Duration FundUTI Ultra Short Term Fund
(Previously UTI Floating Rate Fund)CRISIL Ultra Short Term Debt
Low Duration Fund UTI Treasury Advantage Fund CRISIL Low Duration Debt
Money Market Fund UTI Money Market Fund CRISIL Money Market
Short Duration Fund UTI Short Term Income Fund CRISIL Short Term Bond Fund
Corporate Bond Fund UTI Corporate Bond Fund CRISIL Corporate Bond Composite
Medium Duration Fund UTI Medium Term Fund CRISIL Medium Term Debt
Medium to Long Duration Fund UTI Bond Fund CRISIL Medium to Long Term Debt
Dynamic Bond UTI Dynamic Bond Fund CRISIL Dynamic Debt
Credit Risk FundUTI Credit Risk Fund
(Previously UTI Income Opp. Fund)CRISIL Short Term Bond Fund
Banking and PSU Fund UTI Banking and PSU Debt Fund CRISIL Banking and PSU Debt
Gilt FundUTI Gilt Fund
(Previously UTI Gilt Adv. Fund LTP)CRISIL Dynamic Gilt
Debt Funds Category
30
#Equity: S&P BSE 200; Debt & Money Market Instruments: CRISIL Bond Fund; Gold ETFs: Prices of Gold
Hybrid Category Schemes Benchmark (New)
Conservative Hybrid Fund
UTI Regular Savings Fund
(Previously UTI MIS Advantage Plan)
(Merging of UTI CRTS, UTI MIS & UTI SWSP)
CRISIL Hybrid 75 + 25
Conservative
Aggressive Hybrid FundUTI Hybrid Equity Fund
(Previously UTI Balanced Fund)
CRISIL Hybrid 25+75
Aggressive
Equity Savings Fund UTI Equity Savings Fund CRISIL Equity Savings Index
Multi Asset AllocationUTI Multi Asset Fund
(Previously UTI Wealth Builder Fund)Customised Index#
ArbitrageUTI Arbitrage Fund
(Previously UTI Spread Fund)Nifty 50 Arbitrage
Hybrid, Solution Oriented, Index & ETFs Category
Index / ETFs Schemes Benchmark (New)
Index Fund UTI Nifty Index Fund Nifty 50
Index Fund UTI Nifty Next 50 Index Fund Nifty Next 50
ETF – S&P BSE Sensex UTI Sensex Exchange Traded Fund S&P BSE Sensex
ETF – Nifty 50 UTI Nifty Exchange Traded Fund Nifty 50
ETF – Nifty Next 50 UTI Nifty Next 50 Exchange Traded Fund Nifty Next 50
ETF – Gold UTI Gold Exchange Traded Fund Prices of Gold
Solution Oriented Schemes Benchmark (New)
Children's Fund
UTI Children’s Career Fund – Savings Plan
(Previously UTI Children’s Career Balanced Fund)
CRISIL Short Term Debt
Hybrid 60+40 Fund
UTI Children’s Career Fund – Investment Plan
(Previously UTI CCP Advantage Fund)S&P BSE 200
Retirement Fund UTI Retirement Benefit Pension FundCRISIL Short Term Debt
Hybrid 60+40 Fund
31
Equity – Products
UTI MastershareUnit Scheme
UTI Core Equity Fund
UTI Equity Fund
UTI Value Opportunities Fund
UTI Mid Cap Fund
Market Capitalisation
Large Cap Mid Cap Small Cap Scheme Characteristics
Min. 80% in Large Cap Stocks
Min. 35% in Large & Mid Cap each
Investing across the Market Caps
Following Value investment Strategy
Min. 65% in Mid Cap Stocks
32
Fixed Income – Product Positioning : Duration vis-a-vis Credit Quality
1 day 3 to 4 yrs0 to 3 mths
3 to 6
mths6 to 12 mths
1 to 3 years
4 to 7 yrs 7+ yrs
CREDIT ORIENTEDAAA/AA+: <=35%
AA/AA-/A : 65% >=
MODERATE QUALITYAAA/AA+: 50% to 70%
AA/ AA-/ A : 30% to 50%
HIGH QUALITYAAA/ AA+ : 80% >= AA/ AA-/ A: <= 20%
HIGHEST QUALITYAAA/AA+ : 95% >=,
AA/ AA-/ A : <= 5%
DURATION BUCKET
CREDITQUALITY
UTI
OVERNIGHT
FUND
UTI LIQUID
CASH PLAN
UTI ULTRA
SHORT
TERM FUND
UTI TREASURY
ADVTG FUND
UTI MONEY
MKT FUND
UTI B&PSUD
FUND
UTI SHORT TERM
INCOME FUNDUTI BOND
FUND
UTI CREDIT
RISK FUND
UTI GILT FUND
UTI DYNAMIC
BOND FUND
UTI MEDIUM
TERM FUND
33
UTI CORPORATE
BOND FUND
Hybrid - bucketing by Scheme Characteristics
UTI CCF – Savings Plan
UTI RBPF
UTI Regular Savings Fund
Debt :60% to 100%
Equity : 0% to 40%
Debt :75% to 90%
Equity :10% to 25%
Debt :60% to 100%
Equity : 0% to 40%
UTI Hybrid Equity Fund Equity :65% to 80%
Debt: 20% to 35%
UTI Arbitrage Fund Equity : 65% to 100%
Derivatives :65% to 100%
UTI Multi-Asset Fund*Equity :65% to 100%
Debt:10%to 25
Gold:10% to 25%
UTI CCF – Investment PlanEquity : 70% to 100%
Debt : 0% to 30%
Arbitrage
Multi Asset
Hybrid Aggressive
Solution Children
Solution Retirement
Conservat
Hybrid Conservative
Solution Children
UTI ULIP@ Dynamic Allocation Debt :60% to 100%
Equity : 0% to 40%
9
3
2
1
5
6
7
8
*of which Cash future arbitrage opportunities 20% to 75%, Net long equity position 20% to 50%@ subject to SEBI approval
34
UTI Equity Savings Fund Equity: 65% to 90%*
Debt: 10% to 35% Equity Savings4
Name of the Scheme This product is suitable for investors who are seeking* Riskometer
UTI Mastershare Unit Scheme
(Large Cap Fund- An open ended equity scheme
predominantly investing in large cap stocks)
• Long term capital appreciation
• Investment predominantly in equity instruments of large cap
companies
UTI Core Equity Fund
(Large & Mid Cap Fund- An open ended equity scheme
investing in both large cap and mid cap stocks)
• Long term capital appreciation
• Investment predominantly in equity instruments of both large cap
and mid cap companies
UTI Mid Cap Fund
(Mid Cap Fund- An open ended equity scheme
predominantly investing in mid cap stocks)
• Long term capital appreciation
• Investment predominantly in mid cap companies
UTI Value Opportunities Fund
(An open ended equity scheme following a value
investment strategy)
• Long term capital appreciation
• Investment in equity instruments following a value investment
strategy across the market capitalization spectrum
UTI Equity Fund
(Multi Cap Fund- An open ended equity scheme investing
across large cap, mid cap, small cap stocks)
• Long term capital appreciation
• Investment in equity instruments of companies with good growth
prospects across the market capitalization spectrum
UTI Dividend Yield Fund
(An open ended equity scheme predominantly investing in
dividend yielding stocks)
• Long term capital appreciation
• Investment predominantly in dividend yielding equity and equity
related securities
UTI Infrastructure Fund
(An open ended equity scheme following the
Infrastructure theme)
• Long term capital appreciation
• Investment predominantly in equity and equity related securities of
companies forming part of the infrastructure sector
UTI MNC Fund
(An open ended equity following the theme of investing
predominantly in equity and equity related securities of
Multi-National Companies)
• Long term capital appreciation
• Investment predominantly in equity and equity related securities of
Multi-National companies
UTI India Lifestyle Fund
(An open ended equity scheme following the theme of
changing consumer aspirations, changing lifestyle and
growth of consumption)
• Long term capital growth
• Investment in equity instruments of companies that are expected to
benefit from of the changing consumer aspirations, changing
lifestyle and growth of consumption
Product Label
*Investors should consult their financial advisers if in doubt about whether the product is suitable for them.
35
Name of the Scheme This product is suitable for investors who are seeking* Riskometer
UTI Banking and Financial Services Fund
(An open ended equity scheme investing in Banking and
Financial Services Sector)
• Long term capital appreciation
• Investment predominantly in equity and equity related securities of
companies engaged in banking and financial services activities.
UTI Healthcare Fund
(An open ended equity scheme investing in the Healthcare
Services Sector)
• Long term capital appreciation
• Investment predominantly in equity and equity related securities in the
Healthcare Services sector.
UTI Transportation and Logistics Fund
(An open ended equity scheme investing in transportation
and logistics sector)
• Long term capital appreciation
• Investment predominantly in equity and equity related securities of the
companies engaged in the transportation and logistics sector
UTI Long Term Equity Fund (Tax Saving)
(An open ended equity linked saving scheme with a
statutory lock in of 3 years and tax benefit)
• Long term capital growth
• Investment in equity instruments of companies that are believed to
have growth potential
UTI Arbitrage Fund
(An open ended scheme investing in arbitrage
opportunities)
• Capital appreciation over medium to long term
• Takes advantage of arbitrage opportunities in cash and derivative
market without taking any directional/ unhedged position in either
equity or derivative instruments
UTI Nifty Index Fund
(An open ended scheme replicating/ tracking Nifty 50
index)
• Capital growth in tune with the index returns
• Passive investment in equity instruments comprised in Nifty 50 Index
UTI Nifty Next 50 Index Fund
(An open ended scheme replicating/ tracking Nifty 50
index)
• Capital growth in tune with the index returns
• Passive investment in equity instruments comprised in Nifty Next 50
Index
UTI Sensex Exchange Traded Fund
(An open ended scheme replicating/ tracking S&P BSE
Sensex index)
• Long term investment
• Investment in securities covered by S&P BSE Sensex
UTI Nifty Exchange Traded Fund
(An open ended scheme replicating/ tracking Nifty 50
index)
• Long term investment
• Investment in securities covered by Nifty 50 Index
UTI Nifty Next 50 Exchange Traded Fund
(An open ended scheme replicating/ tracking Nifty Next 50
index)
• Long term investment
• Investment in securities covered by Nifty Next 50
UTI Gold Exchange Traded Fund
(An open ended scheme replicating/ tracking Gold)
• Returns that, before expenses of the Scheme, closely track the
performance and yield of Gold
• Investment predominantly in gold and gold related instruments
Product Label
*Investors should consult their financial advisers if in doubt about whether the product is suitable for them.36
Name of the Scheme This product is suitable for investors who are seeking* Riskometer
UTI Overnight Fund
(An open ended debt scheme investing in overnight securities)
• Reasonable income over one day with capital preservation
• Investment in overnight securities
UTI Liquid Cash Plan
(An open ended liquid scheme)• Steady and reasonable income over short-term with capital
preservation.
• Investment in money market securities & high quality debt
UTI Ultra Short Term Fund
(An open ended ultra-short term debt scheme investing in instruments such
that the Macaulay duration of the portfolio is between 3 months and 6
months)
• Reasonable income with low volatility over short term
• Investment in debt & money market instruments
UTI Treasury Advantage Fund
(An open ended low duration debt scheme investing in instruments such that
the Macaulay duration of the portfolios is between 6 months and 12 months)
• Reasonable income consistent with high liquidity over short term
• Investment in Debt & Money Market instruments
UTI Money Market Fund
(An open ended debt scheme investing in money market
instruments)
• Reasonable income with high level of liquidity over short-term
• Investment in money market securities
UTI Corporate Bond Fund
(An open ended debt scheme predominantly investing in AA+ and
above rated corporate bonds)
• Optimal returns over the medium to long term
• To invest predominantly in AA+ and above rated corporate debt
UTI Short Term Income Fund
(An Open ended Short Term Debt Scheme investing in instruments such that
the Macaulay duration of portfolio is between 1 year and 3 years)
• Reasonable income with low risk and high level of liquidity over
short-term
• Investment in Debt & Money Market instrument
UTI Medium Term Fund
(An open ended medium term debt scheme investing in instruments such
that the Macaulay duration of the portfolio is between 3 years and 4 years)
• Reasonable income over the medium to long term
• Investment in Debt & Money Market Instruments
UTI Bond Fund
(An open ended medium term debt scheme investing in instruments such
that the Macaulay duration of the portfolio is between 4 years and 7 years)
• Optimal returns with adequate liquidity over medium to long term
• Investment in Debt & money market instruments
UTI Dynamic Bond Fund
(An open ended dynamic debt scheme investing across duration)
• Optimal returns with adequate liquidity over medium to long term
• Investment in Debt & Money Market Instruments
UTI Credit Risk Fund
(An open ended debt scheme predominantly investing in AA and below
rated corporate bonds (excluding AA+ rated corporate bonds))
• Reasonable income and capital appreciation over medium to
long term
• Investment in debt and money market instruments
Product Label
*Investors should consult their financial advisers if in doubt about whether the product is suitable for them.37
Name of the Scheme This product is suitable for investors who are seeking* Riskometer
UTI Banking and PSU Debt Fund
(An open ended debt scheme predominantly investing in
debt instruments of Banks, Public Sector Undertakings,
Public Financial Institutions and Municipal Bonds)
• Reasonable income, with low risk and high level of liquidity over short to
medium term
• Investment predominantly in Debt & Money Market Securities issued by
Bank, Public Sector Undertaking (PSUs), Public Financial Institutions (PFIs)
and Municipal Bonds
UTI Gilt Fund
(An open ended debt scheme investing in government
securities across maturities)
• Credit risk free return over the medium to long term
• Investment in sovereign securities issued by the Central Government
and/or a State Government and/or any security unconditionally
guaranteed by the Central Government and/or a State Govt.
UTI Regular Savings Fund
(An open ended hybrid scheme investing predominantly in
debt instruments)
• Long-term capital appreciation and regular income over medium-term
• Investment in equity instruments (maximum 25%) and fixed income
securities (debt and money market securities)
UTI Hybrid Equity Fund
(An open ended hybrid scheme investing predominantly in
equity & equity related instruments)
• Long term capital appreciation
• Investment in equity instruments (maximum-80%) and fixed income
securities (debt and money market securities)
UTI Equity Savings Fund
(An open ended scheme investing in equity, arbitrage and
debt)
• Long term capital appreciation and income
• Investment in equity & equity related instruments, arbitrage opportunities,
and investments in debt and money market opportunities
UTI Multi Asset Fund
(An open ended scheme investing in equity, debt & Gold
ETFs)
• Long term capital appreciation
• Investment in equity, debt and Gold ETFs with a minimum allocation of
10% in each asset class.
UTI Children’s Career Fund – Savings Plan
(An open ended fund for investment for children having a
lock-in for at least 5 years or till the child attains age of
majority (whichever is earlier))
• Long term capital appreciation
• Investment in equity instruments (maximum-40%) and debt instruments
UTI Children’s Career Fund – Investment Plan
(An open ended fund for investment for children having a
lock-in for at least 5 years or till the child attains age of
majority (whichever is earlier))
• Long term capital appreciation
• Investment in equity instruments (above 70%) and debt instruments
UTI Retirement Benefit Pension Fund
(An open ended retirement solution oriented scheme
having a lock-in of 5 years or till retirement age (whichever
is earlier)
• Long term capital appreciation
• Investment in equity instruments (maximum - 40%) and debt/money
market instruments
*Investors should consult their financial advisers if in doubt about whether the product is suitable for them.
Product Label
38
AMFI: Association of Mutual Funds of India
Avg. Average
Bn: Billion
BoJ: Bank of Japan
BoP: Balance of Payments
CAD: Current Account Deficit
CAGR: Compounded Annualized Growth Rate
CP: Commercial Papers
CPI(IW): CPI Industrial Workers
CPI: Consumer Price Index
CPOS: Capital Protection Oriented Scheme
CSO: Central Statistical Office
Dual Adv. FTF: Dual Advantage Fixed Term Fund
EBITDA: Earning Before Interest, Tax, Depreciation, Amortization
ECB: External Commercial Borrowing
ELSS: Equity Linked Savings Scheme
EPS: Earnings Per Share
FD: Fiscal Deficit
FMPs: Fixed Maturity Plans
Forex: Foreign exchange
FTIF: Fixed Term Income Fund
FY: Financial Year
GDP: Gross Domestic Product
GVA: Gross Value Added
39
Glossary
GST: Goods & Services Tax
IIP: Index of Industrial Production
INR: Indian Rupee
MF: Mutual Fund
MOSPI: Ministry of Statistics and Programme Implementation
P/E: Price to Earning Multiple
RBI: Reserve Bank of India
SEBI: Securities & Exchange Board of India
US Fed/Fed: US Federal Reserve
USD: US Dollar
vs: Versus
WPI: Wholesale Price Index
YoY: Year on Year
Thank You
REGISTERED OFFICE: UTI Tower, ‘Gn’ Block, Bandra Kurla Complex, Bandra (E), Mumbai - 400051. Phone: 022 – 66786666. UTI Asset Management
Company Ltd (Investment Manager for UTI Mutual Fund) Email: [email protected] . (CIN-U65991MH2002GOI137867). For more information, please
contact the nearest UTI Financial Centre or your AMFI/NISM certified UTI Mutual Fund Independent Financial Advisor (IFA) for a copy of the
Statement of Additional Information, Scheme Information Document and Key Information Memorandum cum Application Form.
Disclaimers: The information on this document is provided for information purposes only. It does not constitute any offer, recommendation or
solicitation to any person to enter into any transaction or adopt any hedging, trading or investment strategy, nor does it constitute any
prediction of likely future movements in rates or prices or any representation that any such future movements will not exceed those shown in
any illustration. Users of this document should seek advice regarding the appropriateness of investing in any securities, financial instruments or
investment strategies referred to on this document and should understand that statements regarding future prospects may not be realized.
The recipient of this material is solely responsible for any action taken based on this material. Opinions, projections and estimates are subject
to change without notice.
UTI AMC Ltd is not an investment adviser, and is not purporting to provide you with investment, legal or tax advice. UTI AMC Ltd or UTI Mutual
Fund (acting through UTI Trustee Company Pvt. Ltd) accepts no liability and will not be liable for any loss or damage arising directly or
indirectly (including special, incidental or consequential loss or damage) from your use of this document, howsoever arising, and including
any loss, damage or expense arising from, but not limited to, any defect, error, imperfection, fault, mistake or inaccuracy with this document,
its contents or associated services, or due to any unavailability of the document or any part thereof or any contents or associated services.
Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.