The Hindu Business Line : `UTI MF will use technology to add to its strengths'

MR U.K. SINHA, the new CEO of UTI Mutual Fund, insists that the MF, which currently manages about Rs 25,000 crore, will be akin to a private-sector fund, its strong public sector links notwithstanding.

He also dwells on a range of issues in his interview to Business Line, including UTI International and the recent (and hitherto-unproductive) arrangement with State Street Global Advisors (SSgA).

Excerpts:

Despite such compelling PSU linkages, why do you claim that UTI MF will be akin to a private-sector fund?

It is true that four large public-sector financial institutions, including such big names as SBI and LIC, own our equity. It is also true that these institutions have their own asset management arms. What I mean is that there will be no overlap of operations.

UTI MF will use technology to add to its strengths. The latter include its wide range of schemes and a network that is expanding rapidly. I am referring to our recent attempts to create more points of presence as well as establish distribution tie-ups with leading banks.

The tie-up with State Street has not taken off. Your comments.

What we had proposed to do through our association with SSgA was quite ambitious. The idea was to provide domestic investors with additional choices. That was in May 2004.

Subsequently, a couple of products were conceived. As things stand, a revision in the relevant legislation is awaited. The Government has to take a view on the matter. Meanwhile, we have not lost hope.

Where do you see UTI International in the days ahead?

It will have a key role to play in our scheme of things, given the kind of plans that we have laid. The idea is to tap our overseas links in order to do business on a larger, international scale. Let me tell you here that we already offer a number of offshore products; among these, the pharma fund has done quite admirably.

It will also be pertinent to say that UTI MF is trying to tap more NRI investors, who we think will become an even more important source of business in the days to come. You can look forward to receiving more news on this front in future.

What is the point in having as many as three schemes offering benefits u/s 80C?

You are obviously referring to ULIP, Retirement Benefit Pension Fund and Equity Tax Saving Plan, which allow income tax benefits. Well, each of these products has a USP, something that will continue to be offered in future.

Since you have raised the issue, let me say that Section 80C will be a positive for MF investors. Its impact will be truly felt in the New Year and beyond. Incidentally, a number of other fund houses are known to be keen on offering tax-saving schemes. Thanks to the recently-introduced provision as well as the latest clarification issued by the Government, we expect a whole new set of investors to join the UTI family.

Will there be any more consolidation of products?

An exercise to rationalise our product basket has been concluded recently with the amalgamation of five schemes, including the erstwhile Grandmaster and US 92, into UTI Opportunities Fund. The latter, now a dynamic sector allocation product, currently manages well over Rs 500 crore.

As for new products, the market can expect a few from our side, including equity schemes, in the New Year.