The Hindu Business Line : UTI's ULIP gets new fund manager

UTI Mutual Fund has replaced the fund manager in charge of Unit Linked Insurance Plan (ULIP), which, with nearly Rs 3,800 crore under its management, is the country's largest fund.

Mr Siddharth Dembi, who has now been mandated for the job, has replaced Ms Anita Madan, who had been handling the scheme for a fairly long time.

ULIP, the mother of all unit-linked plans that dates back to 1971, has been given a new lease of life with the change, according to sources, who referred to the constraints under which the scheme is considered to be functioning at the moment.

Such constraints come in the shape of competition from unitised products devised by insurance companies.

ULIP, which can invest up to 40 per cent of its assets in equities, offers investors an exemption under the newly introduced Section 80C of the I-T Act as well as life and accident insurance cover.

A jumbo-sized scheme compared to many other funds, it is larger than Franklin Templeton's Flexicap (Rs 2,013 crore), Reliance Equity Opportunity (Rs 1,730 crore) and Franklin Templeton's Prima Fund (Rs 1,680 crore).

Mr Dembi said that changes are being made in the fund's composition so as to tide over the latest bout of volatility.

ULIP, which had 34 per cent of its assets in equities in end-May, has a mix of large and mid-cap stocks.

ITC, Reliance, and HPCL were the top three holdings, with smaller allocations made to stocks such as JCT, Rallis, Asian Paints, and Sicom.

On the debt front, it is felt that the market will remain volatile due to increase in oil price and hardening of international interest rates.

"Over a longer term, debt markets could surprise on the positive as slackening in the global growth becomes apparent," said Mr Dembi in a communiqué to investors.

Bonds and Government securities currently account for about 26 per cent and 18 per cent respectively of the fund's assets.

As on May 31, there was a relatively high current assets component - 20 per cent.

Sources in UTI MF said that ULIP has lately seen certain crucial changes. These include an increase in its target amount to Rs 5 lakh. The minimum target now stands at Rs 15,000.

The scheme had turned NAV-based earlier.

Sources also said that there is a strong case for the MF to push ULIP more aggressively, especially so in the face of competition from unit-linked plans offered by the insurance sector that are gaining in popularity.

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
UTI's ULIP gets new fund manager

Pick A Winner Stock Market Contest

Stock market winners contest