The Hindu Business Line : UTI MF plans a slew of new launches

Fund No. 1
UTI MF regains its No 1 position in the mutual fund industry.
The fund is planning new launches like Capital Protection Fund, Gold Traded Fund and Real Estate Fund.
It is planning also to launch an international fund giving an opportunity to the Indian investors to have a stake in global companies.

Coimbatore , Sept. 14

The UTI Mutual Fund, which has wrested the top position among the mutual funds in so far as Assets Under Management (AUM) is concerned, is targeting Rs 42,500 crore of AUM by the end of March 2007.

Speaking to Business Line in Coimbatore, Mr S. Ganesh, Senior Vice-President, Department of Sales and Marketing, UTI Asset Management Company Pvt Ltd, Mumbai, said that the UTI Mutual Fund at the end of August 2006 had AUM of more than Rs 35,000 crore.

It has regained its No 1 position in the mutual fund industry and has proved that it was as good as any other mutual fund in the country without enjoying any special benefits.

He said several new schemes were in the pipeline including Capital Protection Fund, a Gold Traded Fund — for which it has already filed the documents — and it also wants to launch a Real Estate Fund aimed at the retail investors.

It hopes to launch an international fund giving an opportunity for the Indian investors to have a stake in global companies.

He said UTI was hopeful of mobilising Rs 1,300 crore to Rs 1,500 crore through the `UTI- Wealth Builder Fund', a close-ended equity scheme which is open for subscription till October 11. Of this, nearly 25 per cent was expected to come from South India — a strong market for UTI. He was confident of collecting around Rs 40 crore under this scheme from Coimbatore region itself.

Equity Investment

Giving the reason for launching a scheme when the stock market had run up quite a bit, Mr Ganesh said that equity schemes had given a compounded annual return of 29-30 per cent over a five-year period. He said the Indian economy would continue to grow and only equity investment would meet the aspirations of people.

The new scheme would be converted into an open-ended scheme after five years.

Asked whether it would be better to invest in an existing MF scheme or in a New Fund Offer (NFO), he said while it was true that existing schemes have a track record, it did not mean that NFOs coming at par value were in anyway inferior to the existing schemes.

The existing schemes were already fully invested and it may not be possible for the fund managers to churn the portfolio. But NFO may be able to sense the market opportunity and make gains out of it.

NFOs

Answering a question as to whether NFOs were launched only to mobilise resources, he said while mopping up resources was important, it was not the only reason. While the banking sector has deposits of more than Rs 25 lakh crore, the mutual fund industry has only about Rs 3 lakh crore AUM. The per capita investment in mutual funds is just Rs 30.

The mutual fund penetration level in the country is very low. The NFOs are a means by which the funds would be able to draw the investors to invest for a better future.

Earlier, speaking at a meeting to launch the `UTI-Wealth Builder Fund', Mr K.V. Sundar Rajan, Post Master General, Western Region, said the postal department should become customer friendly if it is to survive.

The department, which markets many mutual fund schemes including UTI MF, has generated substantial business for the UTI MF.