UTI Mutual Fund has filed papers with market regulator SEBI for UTI Global Focused Growth Equity Fund. The open-ended fund of funds scheme will invest in T. Rowe Price Funds (TRPF) SICAV – Global Focused Growth Equity Fund. The T.Rowe product is an overseas fund mainly investing in a diversified portfolio of stocks that may be anywhere in the world, including emerging markets. This will be the first fund of fund scheme from UTI MF stable.
UTI Global Focused Growth Equity Fund will invest 95-100% of assets in units issued by TRPF SICAV Global Focused Growth Equity Fund. Up to 5% will be invested in money market instruments (including CBLO & reverse repo) and units of domestic mutual funds.
At present, TRPF SICAV – Global Focused Growth Equity Fund is a global large-cap growth equity fund as categorized by Morningstar. The overseas fund has an asset base of $1154.74 million. Year to date, the fund has gained 13.78%. Over the last one year, the scheme has risen by 20%.
Over the last 3 years, the overseas fund has gained 24% on an annualized basis while over the 10 years the gains are 11.3% annualized. The fund’s biggest stock weights as on July 31 are Amazon, Becton, Dickinson & Company, Charles Schwab, Facebook, J.P. Morgan Chase & Co., Alphabet, Boeing, and Alibaba. None of these stocks has more than 4% individual weights.
Any changes in the investment pattern of UTI Global Focused Growth Equity Fund will be for short-term and defensive considerations and the FundManager will rebalance the portfolio within 30 days from the date of deviation.
Benchmark – MSCI All Country World Index is the benchmark for UTI Global Focused Growth Equity Fund The benchmark used for TRPF SICAV – Global Focused Growth Equity Fund is MSCI All Country World Index. Hence, the same will be followed for TRPF SICAV – Global Focused Growth Equity Fund also after converting it in Indian Rupee.
Fund manager – Kamal Gada is the dedicated fund manager for making overseas investments. The 36-year old, a CA, CS, and CFA, has about 14 years experience. He is working with UTI AMC since February-2008.
Fund is suitable for – The fund is suitable for investors who plan to invest for the medium to long-term. It may appeal to investors who are interested in investment growth and are looking to diversify their equity investments. However, they must understand and should accept the risks of the fund, including the risks of investing in equities globally.
Unfortunately, investments in international funds are treated the same way as debt mutual funds. This means short-term capital gains (accruing within three years from the date of investment) are combined with the investor’s income and taxed as per his slab. Long-term capital gains (after three years) are taxed at 20% (plus surcharge and any applicable cess) with indexation benefits. This can provide greater tax efficiency than the 10% LTCG without indexation on India-based equity funds. The indexation benefit can provide you greater tax efficiency even though the absolute rate of taxation may seem higher.