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Fund Pick: Masterplus '91

Background

Masterplus'91 is a large open-end equity fund. The fund was originally launched as a closed-end fund in December 1991 and converted into an open-end structure in October 1998. Masterplus declared its first of 12 percent dividend in July 1999. The fund does not carry any entry load, however the fund levies an exit load of 3 percent.

Performance

Master Plus '91 has been an above average performer since its launch both in terms of performance against benchmarks and against peers. In terms of absolute returns, the fund has given an annualised return of 15.36 per cent in its eight-year history. As Masterplus was the second equity fund from UTI launched five years after the first Indian equity fund, Mastershare, the fund raised almost Rs 1,000 crore. The launch of Masterplus coincided with the government's first round of public sector disinvestment. This proved to be rewarding coincidence for the fund, as Masterplus was able to invest heavily into PSU shares at attractive prices.

The initial success of Masterplus'91 can be largely attributed to its aggressive positions in PSUs. In a rising market and the buoyancy in the PSU stocks, Masterplus NAV touched a high of Rs 29 in December 1994. However, with the fall of market in the bear phase and with PSU stocks going out of favour, the fund somehow managed to guard large past of its initial gains and drifted with the market. With its large asset base, the fund was saved from the calamity of landing into small cap IPO's, the market flavour in 1994. In caledar 1999 year-to-date, Masterplus is up 54 percent.

Outlook

Masterplus has been a significant beneficiary with the improvement in the outlook of the cyclical stocks in the current stock market rally. With the momentum of the cyclical stocks gaining solidity combined with increasing market fancy for PSU stocks, Masterplus will be a key beneficiary. Near-term, leadership within the sector will likely be in the large capitalisation and most liquid stocks. And Masterplus is heavily invested in these stocks like Hindustan Petroleum, Hindalco, Reliance, Larsen & Toubro, TELCO, ACC, Grasim and others. If the rally in cyclical stocks continues, the prospects for Masterplus look bright.

FUND BASICS
Objective	Size	NAV:18/10	Exit Price	Entry Price	Total Returns
Growth	1348 Cr	26.66	25.87	26.66	15.28% pa
BENCHMARK COMPARISONS (%)					30/9/99
	1M	3M	6M	1Y	3Y
Fund	-5.1	12.7	20.9	37.7	10.0
Sensex	-2.9	15.1	27.4	48.6	12.5
Nat. Index	0.7	23.6	34.0	55.6	14.0
Obj. Avg.	9.3	22.3	26.6	43.9	7.1
TOP HOLDINGS (25/8/98)					% of Assets
Hindustan Lever					10.45
Mahanagar Telephone Nigam					9.01
I T C					6.16
Bharat Heavy Electricals					5.50
Hindustan Petroleum Corpn.					5.26
Videsh Sanchar Nigam					3.85
Bharat Petroleum Corpn.					3.84
Hindalco Industries					3.07
Reliance Industries					2.89
State Bank Of India					2.75
Smithkline Beecham Consumer Healthcare					2.30
Punjab Tractors					2.05
Indian Hotels Co.					1.85
Nestle India					1.82
Tata Iron & Steel Co.					1.57
Housing Development Finance Corpn.					1.46
Bajaj Auto					1.29
Tata Electric & Locomotives					1.22
Hero Honda Motors					1.16
Asian Paints (India)					1.10

Mutual Funds

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