UTI Banking Sector Fund

UTI Banking Sector fund is being managed by Arun Khurana. It is an average performer in the category of banking funds. If you have invested in this fund, there is no need to panic yet but keep a close watch on where performance is headed. No more than 30% of your total investment portfolio must be allocated to this fund. Sectoral funds are risky to invest in. If you are a new investor you can go in for the category best fund instead.

Where does UTI Banking sector fund invest your money?

UTI Banking Sector fund is invests your money in giant, large, medium and small size banks. UTI Banking Sector fund has 85.25% exposure large sized companies in the banking & financial services sector, 14% in medium sized companies and 1% in small sized companies. Large cap companies tend to be stable compared to mid cap and small cap companies. Small and mid size companies have the potential to become large companies and when that happens you are expected to get bumper returns. Unfortunately it does not happen too frequently.

Suitable for what?
  • Creation of wealth
  • Lifestyle needs
Not suitable for what?
  • Child's Education
  • Child's marriage
  • Buying house
  • Planning for retirement
  • Short term needs
Our recommendation for fresh investment
Not Recommended
Our recommendation for existing investment.
Recommended
How has UTI Banking Sector fund performed in the past?

If you had invested Rs 1 lakh when the fund was launched at March 2004 the value of your investments would be around Rs 4.7 lakhs. If you had invested Rs 1 lakh five years back it would have become Rs 1.76 lakhs. The performance has been not better than or similar to other diversified mutual funds. The fund has been giving at around 12% every year for those who stayed invested for last 5 years.

Assume you had invested Rs 10,000 every month in UTI Banking Sector through SIP for the past 5 years today you would have around Rs 9.21 lakhs.

How will UTI Banking Sector fund perform in the future?

Needless to say no one can predict the future of markets. We have firm belief in the future prospects of the Indian economy. If the Indian economy grows at 9% then the leading companies tend to do well. When the companies do well their stock prices follows their performance. So if you expect the economy to grow at 8% then you can expect top performing mutual funds to give you returns in excess of 14%.

Mutual fund schemes that have exposure to mid size companies tend to show results when their bet on few companies comes true. We advise you to avoid too much of star gazing and future prediction. Be reminded that equities are one of the asset classes that have the potential to beat inflation. Your aim for core portfolio should be to beat inflation.

When to review the performance?

Once you invest in the fund do not get into the habit of checking the NAV daily or monthly. Review the performance once a year. Too much attention is not good.

When to exit?

Withdraw when your goals are closer to achievement. Do not remove the money during when the markets go up or down. Do not panic. Stick to your goals.

What are the tax implications?

The returns in a mutual fund are absolutely tax free, provided you do not withdraw within 1 year. UTI Banking Sector fund does not qualify for sec 80C ELSS benefits.

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