An analyst expects returns as high as 36 per cent in the next six months. UTI has a track record of making schemes open-ended when they come up for redemption. ``Usually, this is done four to five months before the date of redemption. If an investor enters Mastergrowth now he will be entering at a discount of almost 19 per cent to the NAV. According to the current published NAV of the scheme, as on May 12 the NAV is Rs 15.48 and the surge in markets there is a good amount of upside from the current levels", he said.

Mastergrowth has a portfolio which was heavily invested in commodity and cyclical stocks as on June 30, 1998. "This means that the current rally in the markets, which saw almost all commodity and cyclical stocks moveup from their lows to double in almost 20 days, must have increased the NAV of the scheme to around Rs 17,'' said an analyst tracking the fund.

At the current market price of Rs 12.45 and an NAV of Rs 17 the returns translate into 36.54 per cent by the end of December, provided the markets remain in the same range. According to the recent published NAV of Rs 15.48 the returns would amount to 24.33 per cent even if the NAV does not rise further from these levels.

``But even if the markets fall it has been observed that the NAV of this scheme has not fallen below Rs 13. So, the downside from the current levels is limited but there is a tremendous upside to the fund,'' said the analyst.

The portfolio of Mastergrowth comprises fundamentally strong shares in a variety of industries including FMCG, pharma, telecom, refineries, petrochemicals, engineering, automobile, steel and cement. The top holdings of the portfolio as on June 30, 1998 are HPCL, HLL, MTNL, BPCL, Hindalco, Bhel, Reliance Industries, VSNL,ITC, Bajaj Auto, SBI, IOC, Grasim Industries, Sail, TISCO, Smithkline Beecham Pharma, Tata Tea, Nestle India, Asian Paints, M&M, GACL, HDFC, Shipping Corporation of India and Tata Chemicals.

The scheme has also been undergoing good amount of portfolio restructuring over the last year and now has considerable exposure to FMCG and pharma sectors.

Almost all the commodity and cyclical stocks have gone up on an average by 80 per cent from thier lows. For example, HPCL has risen by 85.17 per cent from its low, BPCL by 97 per cent from its low, MTNL by 44.6 per cent from its low, ACC by 41.7 per cent from its low and Reliance Industries by 50 per cent from its low.