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March 15, 2002 | 1235 IST
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Money > Business Headlines > Report March 15, 2002 | 1235 IST |
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US-64 to churn portfolio, trade in all stocksRakesh P Sharma & Sangita Shah The Unit Trust of India's Unit Scheme-64 is positioning itself as a normal trader instead of a long-term investor in the equity market. US-64 managers say they will hold no stocks as holy cows and will trade in each and every one of them. Currently, the US-64 scheme has almost 62 per cent of its Rs 130-billion corpus invested in equity. In an interview with Business Standard, N K Garg, general manager, department of fund management (US-64), said: "There is no point in staying invested in a stock if the market offers a better price than its intrinsic value. The same logic applies in the reverse situation. Buying a stock is attractive if the market price is below its intrinsic value." The US-64 will not have any earmarked amount for day-to-day trading and long-term investments, making it a 100 per cent trading portfolio. "The stocks will be churned as and when the market offers openings. We will sell a stock if the price is higher than the intrinsic value and buy it back if it's cheaper in the market," Garg said. This will also help the scheme benchmark its performance to market movements. UTI is already in talks with various agencies to develop a benchmark index for US-64. Benchmarking the scheme to an index will make it more transparent. Currently, there are several indices available in to benchmark the performance of any equity or debt mutual fund schemes. But balanced funds have different ratios of debt and equity, and there are hardly any indices to reflect this diversity. "The index could be a combination of an already available equity and a debt index or may have to be a newly composed one," Garg said. Since the portfolio of US-64 is now almost cleansed by selling property and realty investments, it will be easier to benchmark the portfolio to an index. Powered by ALSO READ:
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