India’s oldest Mutual Fund (MF) scheme, UTI Mastershare Unit Scheme, has completed its 33 years of wealth creation journey on October 15, 2019 and is going strong. Launched in October 15, 1986, this large-cap fund has generated a consistent Compound Annual Growth Rate (CAGR) of 15.627 per cent, thus converting less than Rs 1 lakh (precisely Rs 82,988) invested on the date of inception to Rs 1 crore on its 33rd anniversary day.
So, in absolute terms, the fund has generated 120.5 times returns since its inception and Rs 1 lakh invested at its inception on October 15, 1986 is now valued at Rs 1.2 crore as of October 15, 2019.
Not only it provides a stable and consistent growth, but UTI Mastershare Unit Scheme also has a long standing track record of uninterrupted annual dividend distribution across all market cycles – be it bearish or bullish. Continuing with its tradition of declaring dividends every year, the fund has also declared its 33rd dividend this year.
UTI Mastershare Unit Scheme is an open-ended equity scheme that predominantly invests in large-cap companies having competitive advantage in their respective fields.
Managed by Swati Kulkarni since inception, the scheme follows an investment style of Growth at Reasonable Price (GARP) for stock picking, which means, given the underlying growth in earnings of a company, how much price is reasonable that one should pay to buy that stock in the portfolio.
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The GARP approach provides Kulkarni a framework to buy companies having future earnings growth as well as valuation comfort, which in turn gives the investors a long term wealth creation opportunity with lower volatility, by owning a portfolio of quality companies.
The scheme may not be able to beat aggressive funds in its category during market rally, but with its large cap orientation, the scheme has become a steady performer with relatively lower volatility.
With its investments in quality large cap companies, the scheme is suitable for those equity investors who are looking to build “core equity portfolio” and also for such investors who would prefer regular dividends and capital appreciation over long term.