Uti Transportation And Logistics Fund: Worth The Investment?

The UTI Transportation and Logistics Fund is a mutual fund scheme from UTI Mutual Fund that has been in existence for 11 years and 9 months. It has offered an impressive return of around 15% since its launch and has generated the highest return among thematic funds in the last 5 years. The fund has an expense ratio of 0.85% to 0.86%, which is higher than what most other thematic funds charge. The investment objective of the fund is to generate long-term capital appreciation by investing predominantly in equity and equity-related securities of companies in the transportation and logistics sector. However, it is recommended that regular investors avoid thematic or sector-specific schemes as their performance depends entirely on the fortunes of the theme and sector.

The UTI Transportation and Logistics Fund's performance and historical returns

The UTI Transportation and Logistics Fund is a sectoral/thematic fund, which means it invests in stocks selected from a single sector or a specific theme. The fund has around 95% investment in domestic equities, with the rest going towards debt.

As of 26 September 2024, the fund's latest NAV (Net Asset Value) was ₹326.654. The fund's performance in the last year is 59.16%, in the last three years is 139.77%, and since its launch, it has seen returns of 889.86%.

The fund has given negative returns in both one- and three-year horizons. However, in the five-year horizon, it has offered a return of around 3%, and in the 10-year horizon, it has offered returns of around 16%.

The UTI Transportation and Logistics Fund has an AUM (Assets Under Management) of ₹3,843.10 Crores as of 26 September 2024. The expense ratio of the fund is 1.91%, which is slightly lower than the category average of 2.06%.

The fund has a portfolio turnover ratio of 12.00%, which is significantly lower than the category average of 121.44%. This indicates that the fund manager updates the portfolio less frequently than peers.

Overall, the UTI Transportation and Logistics Fund has offered impressive returns since its launch, but its performance in the shorter one- and three-year horizons has been negative.

The fund's expense ratio and exit load

The UTI Transportation and Logistics Fund has an expense ratio of 1.89% as of 26 August 2024, and 1.91% as of 23 October 2024. The expense ratio is the annual fee charged by the fund house for managing your mutual fund investments. This is deducted from the Net Asset Value (NAV) on a daily basis.

The fund has an exit load of 1% if redeemed within 30 days. The exit load is a percentage of your capital gains payable to the government upon exiting your mutual fund investments.

The UTI Transportation and Logistics Fund is a sectoral/thematic fund, meaning it invests in stocks selected from a single sector or specific theme. It has consistently higher annualised returns than the category average for the past 1, 3, and 5 years. However, its 10-year annualised returns are lower than the category average.

The fund has given negative returns in both one- and three-year horizons. Even in the five-year horizon, it has offered a low return of 3%. However, it has offered attractive returns of around 16% in 10 years. The scheme has offered an impressive return of around 15% since its launch.

The suitability of the fund for regular investors

The UTI Transportation and Logistics Fund is a mutual fund scheme that has been in existence for over 11 years, with an investment objective to generate long-term capital appreciation. The fund predominantly invests in equity and equity-related securities of companies engaged in the transportation and logistics sector.

Suitability for Regular Investors

The UTI Transportation and Logistics Fund is not recommended for regular investors as it is a thematic or sector-specific scheme. The performance of such schemes depends entirely on the performance of the specific theme or sector, which goes through ups and downs in different economic scenarios. Timing the market for these schemes is crucial, and only investors with intimate knowledge about the sector can successfully navigate this.

The UTI Transportation and Logistics Fund has delivered average annual returns of 20.48% since its inception and has doubled the money invested every three years. However, it has provided negative returns in the one and three-year horizons, and a modest 3% return in the five-year horizon. The fund has generated higher returns than its benchmark, the Nifty Transportation & Logistics Total Return Index, in the last three years.

The fund has an expense ratio of 0.85% to 0.86%, which is higher than what most other thematic funds charge. It also has an exit load of 1% if redeemed within 30 days.

In summary, the UTI Transportation and Logistics Fund may not be suitable for regular investors due to its sector-specific nature and the need for specialised knowledge to time the market correctly. However, for investors with advanced knowledge of macro trends and a high-risk appetite, this fund could offer an opportunity for higher returns over the long term.

The fund's portfolio and asset allocation

The UTI Transportation and Logistics Fund is a mutual fund scheme that has been in existence for over 11 years, with an initial launch date of January 1, 2013. The fund has an expense ratio of 0.85-0.86%, which is higher than that of most other thematic funds. The investment objective of the fund is to generate long-term capital appreciation by investing primarily in equity and equity-related securities of companies operating in the transportation and logistics sector.

As of September 30, 2024, the asset allocation of the fund was as follows:

• Equity: 95.00-95.51%
• Debt: 0.06-0.22%
• Other: 4.27-4.49%

The fund's top 10 holdings as of September 30, 2024, were:

• Mahindra & Mahindra Ltd.
• Maruti Suzuki India Ltd.
• Adani Ports and Special Economic Zone Ltd.
• InterGlobe Aviation Ltd.
• TVS Motor Company Ltd.
• Apollo Tyres Limited
• Bajaj Auto Ltd.
• Tata Motors Ltd.
• Motherson Sumi Systems Ltd.
• Eicher Motors Ltd.

The fund has taken less exposure in the automobile and services sectors compared to other funds in the same category. The portfolio turnover ratio of the fund was 11.00-12.00%, while the category average turnover ratio was significantly higher at 121.44-135.27%.

The fund's investment objective

The UTI Transportation and Logistics Fund is a mutual fund scheme from UTI Mutual Fund. The fund's investment objective is to generate long-term capital appreciation by investing predominantly in equity and equity-related securities of companies operating in the transportation and logistics sector.

The fund has been in existence for over 11 years, launching on January 1, 2013. It has offered an impressive return of around 15% since its launch and has doubled the money invested every three years. The fund's ability to deliver consistent returns is in line with most funds in its category, and its ability to control losses in a falling market is above average.

UTI Transportation and Logistics Fund has a higher expense ratio than most other thematic funds, which can impact returns for investors. The fund has generated negative returns in both one- and three-year horizons, but it has offered a 3% return over five years and an attractive 16% return over ten years.

The fund is suitable for investors with advanced knowledge of macro trends who are willing to take selective bets for higher returns and are prepared for the possibility of moderate to high losses, even when the overall market is performing well.

Frequently asked questions