The Hindu Business Line : UTI Mutual plans Wealth Builder Fund

UTI Mutual Fund has worked out a close-ended equity fund with a maturity period of five years. The fund, named UTI Wealth Builder, will be automatically converted into an open-ended scheme upon maturity.

The fund, which will be benchmarked against the BSE Sensex, will aim at long-term capital appreciation by investing chiefly in a diversified portfolio of stocks. It will provide redemption and switch out facilities on an ongoing basis at six-monthly intervals at prices based on the relevant net asset value.

The fund has named what it has called the `specified redemption period' for allowing redemptions and switches - the first five business days on half-yearly basis after the closure of the issue.

UTI Wealth Builder, the offer document placed with SEBI has mentioned, will charge an exit load of four per cent if redemptions are taken within one year from the date of allotment. This will be scaled down progressively; an investor who pulls out after four years but before five years will be required to pay one per cent. Further, no load will be charged later at the time of maturity.

Under normal circumstances, at least 65 per cent of the fund's assets will be invested in equity and equity-related instruments. This may be scaled up to even 100 per cent if circumstances so warrant. The fund manager may use derivatives to hedge the portfolio, it is pointed out.