UTI Transportation & Logistics Fund returned 33% in a year compared to 5.4% returns on equity mutual funds

Why is this mutual fund shining on the bourses?

mutual fund shining on the bourses

The average returns of equity mutual funds in the last year are 5.4%. The Nifty500 returns in the last year are 4.9%. Around 81% of the funds have outperformed the Nifty500. The Nifty50 return in the last year is 3.5%. The UTI Transportation & Logistics Fund has returned 33% last year. 

UTI Transportation & Logistics Fund is the top performing fund, and it is an underrated mutual fund. This sectoral mutual fund has been able to identify the top performing stocks in the last year, and the returns have helped the investors to increase their wealth while simultaneously improving the ratings of the mutual fund. The outperformance was the spectacular rally in the automobile and ancillary sector. Also, the fund has been able to identify the top-performing stocks in the sector. The returns of the Nifty Auto index in the last year are 31%. Thus, UTI Transportation & Logistics Fund has also outperformed its sectoral index. 

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Holdings of UTI Transportation & Logistics Fund

The top holdings of the fund are:-

1) Mahindra and Mahindra – 14%

2) Maruti Suzuki India Limited- 13.9%

3) Tata Motors- 9.8%

4) Eicher Motors- 9.1%

Other fund holdings include Here Motocorp, Bajaj Auto, Ashok Leyland, Adani Ports and Special Economic Zone, Bosch and Apollo Tyres. All these holdings are as of 31st August 2022. 

The top 10 companies in the UTI Transportation & Logistics Fund and the Nifty Auto Index are the same. The allocation is different, though, as the fund is actively managed. This means that the fund manager can take allocation decisions on his/her own. 

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The last year has been good for the Nifty Auto Index, which is at an all-time high. This has resulted in high returns for the UTI Transportation & Logistics Fund. The sector looks stretched at this moment, and if you have holdings in the sector, it might be a prudent strategy to reduce your holdings and take the gains. The long-term potential of the auto sector looks promising, but the stocks look overvalued in the short term. It might be a nice strategy to shift your holdings out of the sector for short to medium term.

Related: What are index funds, and how does one invest in them?

UTI TRANSPORTATION AND LOGISTICS FUND DETAIL PORTFOLIO & ANALYSIS

Disclaimer: This article is intended for general information purposes only and should not be construed as investment or legal advice. You should separately obtain independent advice when making decisions in these areas.

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