UTI Mutual Fund has merged two funds to introduce UTI Top 100 Fund which aims to provide long term capital gains by investing in equity and equity related instruments of top 100 stocks by market capitalisation.

"The new fund has been created by merging Index Select Fund and Master Growth Fund," said Harsha Upadhyaya, fund manager of UTI Mutual Fund.

The new scheme, UTI Top 100 Fund, has been launched with changed fundamental attribute and investment objective, he said.

With this, there would be flexibility to make investment in top 100 stocks, he said, adding, companies in the portfolio have the potential to withstand volatility and sustain through different market cycles.

The fund would have portfolio size of 35-40 stocks, he added.

Prior to merger, Master Growth was required to invest 50 per cent of the corpus in the PSU stocks, while the objective of the other fund restricted investment in the nifty stocks.

As on May 20, Master Growth gave annual return of (-19 per cent) while Index Fund gave return of (-14 per cent).

Top 100 Fund, an open-ended equity oriented scheme, benchmarked against BSE 100. t is available in dividend and growth options.