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Wednesday, Apr 07, 2004

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UTI MF to reposition some IL&FS schemes

Nilanjan Dey

Kolkata , April 6

UTI Mutual Fund, which is set to formally take over the schemes managed by IL&FS MF, plans to retain all of them and reposition a few with a view to make them compatible with its own products.

The co-ordination team set up by the two asset management companies has so far ruled out the merger of any IL&FS MF schemes with similar schemes run by UTI MF. This implies that not even the index funds managed by the former - probably the fittest candidates for merger — will be blended with any of the index products in the UTI MF stable.

Mr A.K. Sridhar, Chief Investment Officer at UTI MF, explained that the IL&FS MF suite of funds would not lose its significance under the new regime.

However, important changes will be made in some of them in order to make them more relevant. Such changes will be particularly introduced in cases where UTI MF has comparable products.

IL&FS Bond Fund, for instance, will be renamed UTI Bond Advantage Fund and positioned in a way that complements UTI's own product in the same category.

"In the new format, it will be positioned for investors who are willing to take relatively more risk. Bond Advantage will take more active calls on the market and may consequently be a little more volatile", he said.

UTI Bond Fund on the other hand will appeal to more conservative investors who may not have an appetite for such volatility.

IL&FS Index Fund, which comes with a Sensex and a Nifty option, will continue to aim at providing dividends to investors, while the index funds managed by UTI will rather focus on capital appreciation.

It may be mentioned here that the sections in the MF industry have voiced their opinion in favour of merging at least index products.

IL&FS MF has a decent range of products, both equity and debt, a couple of which (MIP and Dynamic Equity) were introduced only recently.

There are equity schemes such as Growth & Value and Global India (previously eCom Fund). On the debt side, there is the usual set of income and gilt products.

These funds, said Mr Sridhar (who is part of the co-ordination effort), will be "continued the way they are, at least so for the moment. The equity funds are particularly in a position to do well and we will not disturb them", he added.

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