The Hindu Business Line : `State Street tie-up will widen our products' basket'

HIS current position as UTI Mutual Fund's Chief Marketing Officer is probably a very different cup of tea for Mr Ashutosh Bishnoi, who had earlier headed a much smaller fund house, JM Mutual Fund.

In comparison, the country's No. 1 asset management company is a mammoth organisation, spanning a few dozen funds that command over Rs 20,000 crore.

One of these is Unit Linked Insurance Plan, an unusual scheme with a huge corpus - more than Rs 4,000 crore.

"ULIP is a very special vehicle... but we may have to position it somewhat differently in future," Mr Bishnoi told Business Line.

He also discussed the MF's recent tie-up with State Street Global Advisors.

Why is UTI MF so reticent about ULIP, despite the fact that it is your largest fund?

That's possibly just a perception. It's not that we have been needlessly reserved about it. Some of our other funds have grabbed the market's attention in recent times.

You will recall that we have introduced a number of new products over the past few months and investors have responded to these in a positive manner. The scheme in question, which provides insurance cover as well as tax benefits under Section 88 of the IT Act, has a rare lineage, its year of inception going as far back as 1971.

ULIP has also gone through a few critical changes and has been available at NAV-related prices for the last several years.

How can you market it to a bigger audience?

We will have to examine the possibility of scaling it further down to the lower end of the spectrum so as to reach more investors.

There is a case for building more awareness, especially with respect to the facilities that ULIP provides. These should appeal to people who wish to get both tax and insurance benefits simultaneously. Tax efficiency is always a major consideration with the investor fraternity.

Going forward, there will be competition from the unitised products devised by many of the new insurance companies. These are NAV-based offerings that follow different asset allocation strategies. ULIP has to restrict its equity exposure to 40 per cent.

Incidentally, it has over eight lakh unit holders at the moment. That's a very large number if you consider all the other players in the asset management industry.

How will the alliance with State Street aid investors in India?

This will widen the basket of our products, leading to more choices for investors. As you know, State Street Global Advisors happens to be the largest institutional asset management outfit in the world.

Ours will be an exclusive arrangement, with State Street acting as advisor for overseas investment by our funds. We hope to work out certain schemes, the first of which will soon see the light of the day. It goes without saying that these schemes will have to operate within the norms set by the regulatory agencies.

A section of the local market, we believe, is increasingly looking at cross-border investment opportunities. This is apparent from the feelers that the asset management industry has received so far. Our association with State Street should whet their appetite.

At the end of the day, the products and services that are spawned by the tie-up will help in further development of the UTI MF brand.

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`State Street tie-up will widen our products' basket'