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I had bought 5,225 units of UTI Mastershare a year ago. It has given me a 72% return during this period.
Should I hold on to these units or sell?
- Alice Johnson
UTI Mastershare is the oldest diversified equity fund available. Its launch dates back to October 1986. It started off as a close-ended fund and was converted into an open-ended scheme in September 2003.
Open ended funds means that you can buy and sell the units of the fund anytime.
Closed-end funds are the ones in which you can invest (buy units) only at the time of their launch. Once the launch date is over, they do not accept subsequent investments.
The fund has been laggard in the recent times and our organisation, Value Research, assigned it a two-star rating. Our ratings rank from one to five stars and are arrived at after taking into consideration the risk taken and the return earned.
We are not sure if you have arrived at the right figure; please re-calculate the returns this fund has given to you in the last one year. We believe the only time this fund delivered such high returns in the recent past was in 2003, when it delivered over 80% returns.
In the calendar years 2004 and 2005, the returns have been 23.49% and 31.40% respectively, which is very different from what you have mentioned. Even taking a block of any consecutive 12 months during the last two years is unlikely to yield such high returns.
The fund invests a majority of its assets in large-cap stocks and maintains a well-diversified portfolio. However, in view of the fund's sustained under-performance, you can consider exiting the fund and look for the better options.
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