The Unit Trust of India has reshuffled the portfolio of its US-64 scheme in favour of growth stocks. The Trust, which had come in for a lot of criticism regarding the composition of its portfolio in the previous year, has more than met the demands of the investors. The Trust has increased exposure to software, FMCG and telecom sectors.

The US-64 has a large exposure to cyclical stocks. As a result of this, the fund took a massive beating on its net asset value when the economic cycle turned down. However, after this restructuring the fund has lowered the weightage of cyclicals and public sector undertaking (PSU) stocks in its portfolio. The increased weightage of growth stocks will help the fund in improving its performance.

The UTI has purchased five software stocks - Satyam Computers, Infosys, NIIT, Software Solutions and Pentafour Software. It has also purchased Hindustan Lever for its portfolio.

Although the Trust might have restructured its portfolio there is no guarantee that the fund is likely to perform better in the future. Although the recent rally in the stock prices might bring some respite to the Trust, in the long run it will continue to face problems.

The need of the hour is increased transparency, better pay scales to attract the best talent, and other infrastructural improvements as suggested by the Deepak Parekh Committee. Unless the Trust implements these recommendations and improves its style of functioning, there will always be a possibility that the fund might find itself in the kind of situation it was recently in.

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