UTI India Dynamic Equity
UTI India Dynamic Equity fund invests in a mix of large-, mid- and small-cap Indian companies. The investment process is based on quality, growth, and valuation, and the team conducts thorough on-the-ground research to identify and monitor companies with a high potential for significant market outperformance.
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Ajay Tyagi is the Head of Equities at UTI Asset Management. He holds a CFA Charter from The CFA Institute, USA, and a Master's degree in Finance from Delhi University. Ajay joined UTI in 2000 and has held various roles in equity research, offshore, and domestic onshore funds. He manages UTI's flagship equity scheme in India and serves as the Investment Advisor for UTI International's India-focused offshore funds. Ajay has received numerous awards and accolades for his performance both domestically and globally.
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Talking Factsheet
Investment process
UTI India Dynamic Equity’s approach is based on three pillars: quality, growth, and valuation. The manager will use this approach to select stocks based on their qualitative and financial factors. These factors include speaking with management, analysing a company's products and services, evaluating its competitive advantages, and reviewing financial statements.
The portfolio will consist of companies deemed most attractive at any given time, with a mix of large-, mid- and small-cap stocks. Large-caps typically make up 60-70%, with approximately 30-40% in small- and mid-cap companies.
The manager prefers a long-term approach and holds most core investments for a significant amount of time. This consistent strategy helps reduce the impact of short-term market fluctuations with a focus on a few good ideas rather than too many. The manager also prefers to invest in businesses he understands well and will gradually introduce new concepts into the portfolio after careful observation for a few years.
Industries with stable and secular growth prospects, and companies that can use a market slowdown to strengthen their competitive positioning, are preferred. The team also emphasises management quality, corporate governance, and past earnings track record and capital efficiency, basing investment decisions on careful analysis of the last 10 years' performance and the next 5-10-year outlook.
Risk
UTI Asset Management has developed a robust risk management framework that encompasses various risk control mechanisms. To foster a strong risk management culture, it regularly reviews market, liquidity, and concentration risks. Additionally, it will measure performance against peer groups and perform risk-adjusted performance measurement and performance attribution. This is a single country fund which invests a decent amount in medium and smaller companies, so it may be volatile as a result. Investors should also be aware of currency risk.
ESG
ESG - Integrated
UTI prioritises sustainability and responsible business practices and believes that building long-term, sustainable businesses is crucial for generating economic benefits and employment while minimising environmental impact. Its integrated ESG policy focuses on environmental, social, and governance aspects and includes a dynamic sector-specific ESG framework that selects relevant key parameters and leverages the SASB materiality framework. UTI's internal ESG database houses up to four years of historical ESG data obtained from various sources and helps evaluate individual and peer ESG performance.
To better manage ESG risks, UTI subscribes to Sustainalytics, a top-tier, third-party global ESG rating provider. It also evaluates quantitative and qualitative ESG factors/risks that could affect a company's long-term sustainable performance. The financial analysts adjust their analysis by linking specific aspects of a company's risk management strategy to value drivers such as costs, revenue, capital expenditure, and profits. This information is then communicated to the investment team and fund managers.
UTI also believes in engaging with companies to improve their ESG performance, understand their risk-mitigating strategies, and encourage them to adopt best-in-class ESG practices. Through these ESG-focused discussions, UTI hopes to ensure companies operate sustainably in the long run.
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