Have you seen a Diamond or anything equivalent to that ? No ? I will show you one today . I am going to review a fund which has performed so well that It despite being a Debt oriented Mutual funds has given returns which we expect from Equity over long term . Yes !! .. This fund has no more than 30% allocation in Equity ever and despite that, it has given a long term return of 16.6% (at the time of writing) and has many more accolades to its credit . Lets have a deeper look .
UTI Mahila Unit Scheme-G [Link]
Most of us run around to find the best equity fund who will give us excellent returns . In long run , an average person requires 12-15% of annual returns on his investments , and this fund has given close to 16% return Since Inception . This kind of return what we should expect from equity in Long term .
This is a Fund which is open only for Women of India , Males who wish to invest in this Fund can ask their wives to Invest , Make sure you understand the Income tax Clubbing rules .
Highlights of this Fund
- 8 yrs old Fund (Inception Apr 2001)
- No Entry Load
- Exit Load of .75% if sold before 1 yr (as on 21/10/09)
- Return Since Inception : 16.6%
- 5 yrs return : 18.28%
- Best return in 1 yr time frame is +54%
- Worst return in 1 yr time frame is -10% .
- Consistently outperformed Its Benchmark ( Crisil H 75:25 ) and ‘Category Average” in all the time frames
- Can not invest more than 30% in Equity .
- Well Diversified Portfolio across Equity and Debt investment .
Comparison with Nifty
Below is the chart of Nifty and UTI Mahila Unit Scheme till Dec 08 . You can see how its has given close returns like Nifty . Primarily this fund is a Debt Fund , 70% of this Fund is always in Debt + Cash , only maximum 30% funds are in Equity at any point of time , And still this fund is giving such an excellent Returns .
Who should Invest in This Fund ?
Mainly this fund is a very less risky fund with very high return , You can invest in this fund in Following Scenarios
- If you have short term goals for 2-3 yrs , You can invest in this fund , You have to accept that event this fund has equity exposure and in really bad times, even this can disappoint you . Dont expect it to return the above returns with surety , Its just expectation and you know how “expectations” are broken in Life
. Key to Happiness is Low expectations .
- People near their retirement life and who can take moderate amount of risk can park some part of their money in this fund (Dividend Option) .
- People who are very conservative and adore Fixed Income Products like FD’s , Endowment Insurance , NSC etc and willing to taste “high returns” can put some money here .
Other Alternatives or Good Funds in Same Category
- UTI CRTS 81
- Unit Linked Insurance Plan ’71
- FT India Life Stage FoF 40s
- Birla Sun Life Asset Allocation Conservative
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{ 8 comments… read them below or add one }
Thanks for your valuable suggest. I was trying to find this mutual fund in ICICIDirect, but dont see under UTI fund. any idea.
Manish,
I think Reliance MIP and HDFC MIP Long term are also good. They have almost same ratio of equity and debt and returns are also comparable. Both are around 5 years old. They are available for all and online too. That is not the case for UTI Mahila Scheme. I also liked UTI but then the restriction forced me to move to Rel and HDFC MIPs.
I think they can blend very well with over all portfolio providing debt component with some good return.
By the way your articles carries a fresh look and provides a different point of view. I like reading them. Thanks alot for writing.
Regards,
Anoop
I checked this fund in the latest issue of Mutual Fund Insight of Value Research. This fund is under the catagory 'Hybrid: debt oriented'. It has 5 stars with 2 years returns as 8.7 % and 3 years returns as 12 %. I think these returns are very good considering it is a debt oriented. Only other 5 star fund in this category is UTI CRTS 81, which has given better returns for last 2 years but less returns in long run compared to UTI Mahila.
@Chandra
I also checked , Its not there on icici direct .. Some mutual funds may not be there online with some particular broker .
@Anoop
ok great .. Thanks for the recommendation .. I am sure there are many more .. I just suggested one of them . Thanks for your involvement .
@Milind
We talked over mail
Manish
Finally Manish mentions something on UTI plans.. I particularly was investigating on the ULIP '71.. This is what I had uncovered..
Benefits of the plan:
Liquidity = Since open ended, money can be withdrawn at any point of time
Insurance = Term cover (fixed/reducing) upto 15L without any medical test
Accident cover = upto Rs 50,000
Tax benefits = under Sec 80C, if you are salaried this is what you generically target.
Now, why do you call Mahila Unit a diamond when comparing the above you notice that Mahila Unit doesnt offer you Life Cover+Tax savings.. Comparing the Best and Worst performances and considering the fact that allocation in ULIP '71 is Debt 60% – Equity 40%, odds are that ULIP '71 will meet the reqs of someone younger too as an optional debt fund..
What do you and others feel..
Thanks and Regards,
-Vibhav
@Vaibhav
ULIP 71 looks good by what you say. I would vote for it (though I havent looked at it closely)
The reason I call UTI Mahila a diamond is because of the performance and returns it has given despite having most of its money in Debt .
with 8% expection from Debt and 12% from equity , its return expectation is 9.2% (70:30 debt:equity) . However , the returns it has provided are much better than that .
manish
Do you recommend to invest in SIP or lumpsum for this debt fund?
SIP will be good .
Manish