Setting a realistic financial goal is the first step towards successful investing. Mutual funds can be explored for meeting financial goals ranging from short-term to long-term. Flexi-cap funds are open-ended equity funds investing at least 65% of total assets in equity assets of companies across different market capitalizations. UTI Flexi Cap Fund is one of the oldest funds in the category and has a long-term track record of consistent performance. It has a corpus of over Rs. 24,237 crores and is trusted by over 18.55 lakh investors. This offering from UTI Mutual Fund is suitable for any long-term investor looking for a fund that endeavors to invest in quality businesses having potential for creating economic value for investors.
UTI Flexi Cap Fund’s investment philosophy is built around the three pillars of Quality, Growth and Valuation. Quality is the ability of a business to sustain a high Return on Capital Employed (RoCE) or Return on Equity (RoE) over a long period of time. Truly high quality businesses are those that are able to generate high RoCEs and RoEs even during difficult times and operate above their cost of capital at all times. These strong cash-flows become the source of economic value creation.The fund emphasizes businesses with steady and predictable growth trajectory, rather than cyclical and volatile growth.
High quality businesses create economic value, but high growth businesses enable compounding of this value, so the fund’s favorite hunting ground for stock selection is the intersection of quality and growth. Valuations are an important metric for investing in a business, and the Price to Earnings (P/E) multiple is a widely misunderstood valuation technique. It is important to consider RoCE, opportunity to reinvest in the business, and free cash flow when valuing a business, as it hides more than it reveals.The Fund invests across the market capitalization spectrum, with LTIMindtree, ICICI Bank, Bajaj Finance, HDFC Bank, Kotak Mahindra Bank, Infosys, Avenue Supermarts, HDFC, Info-Edge (India) Ltd.
