Financial Daily from THE HINDU group of publications
Wednesday, Feb 22, 2006
Financial Daily from THE HINDU group of publications Wednesday, Feb 22, 2006 |
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Markets
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New Fund Offer UTI MF's contra fund scheme opens today Our Bureau
Mumbai , Feb. 21 WITH stock markets trading at all-time high levels, mutual funds are looking for value investments by launching `contra' (investments through contrarian approach) or against-the-market (ATM) schemes. The contra or ATM scheme identifies and invests in stocks that have not participated in the market rally. The latest scheme to hit the market is UTI Mutual Fund's `UTI-Contra Fund'. It is an open-ended equity scheme and would invest in stocks that are currently undervalued due to cyclical nature or emotional patterns present in the stock market, officials said here on Tuesday. The NFO (new fund offer) opens on Wednesday and closes on March 22. The scheme will re-open for continuous purchase and redemption from April 20. This is the third contra fund or against-the-market fund hitting the market in recent times, after similar NFOs from Cholamandalam MF and ING Vysya Mutual Fund. "Considering the current growth path of the Indian equity market, we thought that a fund based on a differentiated strategy will be best suitable for the investors' aspirations and will also complement our product basket," said Mr U.K. Sinha, Chairman and Managing Director of UTI Asset Management Company, announcing the launch of the Contra Fund here on Tuesday. Mr A.K. Sridhar, Chief Investment Officer, UTI AMC, said the fund would work with an approach to benefit from non-rational behaviour of the investor and equity markets and focus on out-of-favour stocks. "UTI-Contra Fund would not only be contrarian to the majority but also try to identify stocks with intrinsic potential and a good management bandwidth," he said. Regaining small investors' confidence: Commenting on the recent success of UTI's `Leadership Equity Fund', which mobilised about Rs 2,080 crore through 3.5-lakh applications, Mr Sinha said this reflected that the UTI MF has regained the confidence of small investors. "This is a reflection that investors in remote areas have again reposed faith in UTI. Even in small areas or districts, where we have given small targets like Rs 1-1.5 crore, the realisation was twice or three times the target. We have got most of the money from small investors and from remote places," he said. The Leadership Equity Fund was the first NFO by UTI Mutual Fund, after its restructuring, whereby four entities - LIC, SBI, Bank of Baroda and Punjab National Bank - became the sponsors of the asset management company. Mr D.S.R. Murthy, Executive Director, UTI AMC, said small investors from Guwahati, Karimnagar in Andhra Pradesh and Hubli have responded in an overwhelming manner to the Leadership Fund.
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