The Hindu Business Line : `One has to see redemptions as part of the business'

Like its peers, UTI Mutual Fund too is intensely aware of the fact that an influential section of investors is keen to book profits and move away from a market that is rapidly turning volatile.

"But the trend does not apply equally to all," claims Mr K. Madhava Kumar, CMO, adding that a number of equity funds in the UTI MF fold have actually seen fresh inflows in recent days.

"Clearly, discerning investors will see the decline as an opportunity", he notes.

What sort of redemptions are you facing these days?

It is true that investors' mindset is not the same today. People who have seen the Sensex at over 12,000 points may well feel differently when it has come down to 10,000 or so.

One has to see redemptions as part of the business. Having said that let me repeat what you must have heard before - retail investors are UTI MF's bedrock. They account for a very critical part of the Rs 30,000 crore or so that we manage.

On this front, we are not like some of our peers. Many of these investors are not unnecessarily hyper about a market that goes up and down at great speeds.

We have seen new money entering funds like Index Select, Dividend Yield and Master Value. All these are diversified equity funds.

It would not have been possible unless investors saw merit in these schemes.

But aren't a lot of investors taking to short-term debt products, just to be on the safer side?

The industry to the best of my knowledge has lately seen some shift to debt funds, including the liquid and short-term income variety. Investors who have a little appetite for the risky equity environment have probably wanted to play it safer. No one can really blame them for behaving in a conservative fashion. The current month's numbers will tell the fuller story.

UTI MF does not seem to do much about selling ULIP, which with Rs 4,000 crores or so, is a very large fund...

Investors who are keen to get Section 80C benefits along with insurance cover will actively look at ULIP. Whatever improvisation was to be done in this product has been done. Let me tell you here that the name ULIP invokes a feeling that is associated these days with unit-linked plans offered by life insurance companies.

However, our ULIP has compulsions that do not apply to the plans sold by insurers. The large size that you mention is a result of the underlying interest in a scheme that can be traced back to the 1970s.

Have the recent scheme renamings translated into higher sales?

A fund is re-branded if it has to be positioned differently in line with the latest market dynamics. In the recent past, we have done this on a few occasions.

UTI Opportunities Fund, for instance, came into being when five schemes, Grandmaster included, were combined.

More recently, we have renamed our Basic Industries Fund as UTI Infrastructure Fund. Hopefully, the user community will appreciate why these changes were warranted.

Let me also add that we hope to start gaining from our tie-ups with banks in a bigger way from now on.

Many bank employees are currently being trained on various aspects of mutual funds and their marketing.

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