The fully Securities and Exchange Board of India (Sebi)-compliant mutual fund institution, sliced from the erstwhile Unit Trust of India (UTI), houses 26 equity dedicated schemes out of a total of 47 schemes.
In order to be more focused, the countrys largest mutual fund has set out its objective of having a maximum of 20 companies for an equity-dedicated scheme having a corpus size up to Rs 100 crore.
For schemes having assets under management (AUM) of over Rs 100 crore and less than Rs 400 crore, a maximum of 30-40 companies will be the norm, while in schemes with a corpus size over Rs 400 crore a maximum of 50-60 companies will comprise the portfolio.
Explaining the new norm to FE, a senior UTI official said: We are constantly looking at opportunities of unwinding stocks belonging to second- and third-tier companies in big lots. The objective of all our equity dedicated schemes would be to remain more focused by way of fewer number of companies.
The broad idea is to have a focused portfolio. Even with 40 to 50 companies, the objective of diversification is well achieved as nearly 95 per cent of all sectors is covered, he added. It is also easy to track schemes having a limited number of companies, he opined.
The equity schemes likely to get trimmed aggressively in the coming days are UTI Mastershare Unit Scheme, UTI Mastergain Unit Scheme, UTI Masterplus Unit Scheme and UTI Master Equity Plan (MEP).
Mastershare houses about 110-120 companies with a corpus size of around Rs 1,020 crore. Mastergain with an AUM of about Rs 840 crore too houses similar number of firms.
Masterplus houses around 85 scrips and has a corpus size of about Rs 450 crore and MEP 94, with about 60 companies, has a corpus size of about Rs 182 crore.
The downsizing in terms of number of companies in a scheme is not only confined to UTI MF but also in select schemes of UTI-I (Specified Undertaking of the Unit Trust of India), the assured returns portion carved out of UTI.
UTIs flagship scheme US-64, which currently has around 900 companies, had also planned to trim the figure down to under 200 companies.