The US-64 has bounced back with a vengeance from the bottom it hit in 1998, riding on the wave of booming markets in the early part of 2000. This was also made possible due to positive investor response and active portfolio churning during the year. UTI has a July-June financial year.

The scheme witnessed a total turnaround of Rs 5,468 crore due to a net positive sales of Rs 2,337 crore as against a contraction of Rs 3,131 crore in the previous year. Repurchases under the scheme stood at Rs 2,258 crore during 1999-2000, as against Rs 7,770 crore during 1998-99. This was a decline of 71 per cent.

The scheme drew sustenance from large inflows into unit premium reserves at about Rs 500 crore as against an outflow of around Rs 1,000 crore in the previous year and a write-back on the provision for depreciation aggregating Rs 500 crore. Further, Rs 750 crore accrued to the kitty through higher general reserve and higher revenue appropriations.

The 1999-2000 annual report of the country's largest mutual fund said that the unit capital of the scheme stood at Rs 15,146 crore over Rs 13,544 crore, a rise of 11.8 per cent while the market value of the investments went up by 22 per cent to Rs 21,297 from Rs 17,425 crore. There was a 17.3 per cent rise in the net income to Rs 2,800 crore during 1999-2000 up from Rs 2,388 crore last year.

The US-64 has rebalanced continuously its portfolio and booked profits at every opportunity during the year. The fund's performance has been mainly attributed to active portfolio restructuring and churning. It has increased its exposure to the growth sectors such as IT, media, telecom and pharma to 36 per cent during 1999-00 from 15 per cent during the corresponding period of last year. Within these new growth US-64 reserves rocket 2500% to Rs 3,492 crore in 1999-2000 sectors, exposure in IT and media has increased to 23 per cent from 6 per cent, while it reduced its exposure to cyclicals to 10 per cent from 16 per cent.

"While reducing the cyclicals, care has been taken to ensure that the stocks, which have growth potential, have been retained to add value to the US-64 portfolio as this sector has started turning around," the report said. Further, it also said even after taking exposure to the IT and media stocks, the risk diversification attained in the flagship scheme is healthy and takes care of market vicissitudes.