The Hindu Business Line : UTI: More surprises in store

UTI Mutual Fund will not cease to surprise the market in the days ahead. The country's largest asset management company, which has already displayed enough signs of resilience, has maintained its lead over others of its ilk. It has also indicated that it has the potential of pulling off more than what has been accomplished so far.

UTI MF will indeed reach an unassailable position if it can fully meet the objective outlined by its Chief Managing Director. In Mr M. Damodaran's view, the fund house needs to remain the ordinary Indian's most preferred vehicle for entry into the capital markets.

For the record, the MF has a large collection of schemes. The variety is evident if one considers the options. They range from pure equity to pure debt, from diversified equity to sector-specific products, from index trackers to actively managed schemes. Added to these are one-off options, including special ones aimed at women or children or simply to those who wish to plan their taxes.

Let us at this juncture turn to the oddballs in the UTI stable. Allow us to pick up just four of them without trying to be a ready reckoner for the MF. Normally, not everybody talks about these. However, believe me, they make interesting reading. Take, for instance, UTI-CRTS, a scheme that caters to trusts and registered societies. With October 1981 as its month of launch, it is a fairly old warhorse, one that has given 14.4 per cent returns since inception (as on February 27, 2004). It is predominantly invested in debt (nearly 70 per cent), with limited allocation to equity.

Also consider UTI Index Select Fund, which invests in Sensex and Nifty stocks without trying to replicate any of these benchmarks. The last statement from the fund manager concerned (Mr Sanjay Dongre) notes that the market's focus is likely to be on index constituents as conditions may well be volatile in the short term. Such stocks are large-cap names, commanding good liquidity and representing industry leaders.

Among the more remarkable elements is UTI Retirement Benefit Plan. It is a pension product for investors after they turn 58 and comes to them in the shape of periodical cash flows up to the extent of repurchase value of their holdings through a systematic withdrawal plan. RBP is a balanced scheme (with a maximum equity allocation of 40 per cent) which has given about 11 per cent since inception in December 1994.

UTI ULIP, a unit-linked insurance plan, is arguably the most interesting of the lot. This too is balanced fund with a maximum 40 per in equity. The notable point is that investments here will fetch you exemptions under Section 88 of the IT Act. Also, there are life and accident insurance covers. This has a huge corpus of well over Rs 4,000 crore.

Feedback may be sent to blcal@vsnl.net

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