Monday, March 16, 2009

UTI Gold-Equity Fund

UTI Gold-Equity Fund
Mr.Sridhar wrote
"sir, I like your blog goodfundadvisor very much. Can you please throw light on the new fund UTI Wealth Builder Fund which has a combination of Gold and Equity"

SRIKANTH SHANKAR MATRUBAI replied :
Dear Sridhar,
UTI-Wealth Builder Fund - Series II, is an open-ended equity oriented scheme. The objective of the Scheme is to achieve long term capital appreciation by investing predominantly in a diversified portfolio of equity and equity related instruments along with investments in Gold ETFs and Debt and Money Market Instruments.
The fund aims to invest about 65% in equities and 35% in Gold ETFs and debt instruments.
This combination of equity, debt and gold is an innovative scheme and looking at the asset allocation and large cap tilt, it should be a conservative offering with low volatility.
Gold has been one asset that has been counter-cyclical in nature and hence an ideal asset in portfolio diversification.
Thus this fund will be a Low risk and Low Return Fund as it be investing mainly in Large Caps.
This Fund is for Ultra Conservative Investor with a view to have slight exposure to Equities. Sure, invest in this fund, if you want to have a Low Risk Low Return Fund. I do not expect this fund to give you returns more than 12% on an average. Even in Super Bull Market, the fund could give a max of 15-18% return.
Instead you can consider investing in Good diversified Equity fund and some allocation to Gold ETfs.
Best of luck,
Srikanth Shankar Matrubai

Also visit http://equityadvise.blogspot.com for an indepth Equity Analysis

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