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S. Vaidya Nathan

THE assured return scheme Monthly Income Plan 1997 (I) is coming up for redemption at end April. The Unit Trust of India had guaranteed returns and capital protection on the backing of its Development Reserve Fund. Now there are plans to launch a separate scheme to enable investors to roll over to the new scheme, which is yet to get SEBI approval. The proposed UTI Income Scheme 2002 will be an open-ended debt fund. There are no guaranteed returns, and only high-rated debt securities and liquid stocks from MIP'97 will be transferred to the proposed fund. Unitholders can roll over to the new scheme between May 1 and 10 at NAV.

The new plan offers growth and income options. The minimum subscription amount is Rs 20,000 for the income plan and Rs 5,000 for the growth plan. If SEBI approves the scheme, investors have to make a choice: take cash and exit at NAV, or roll over to the new scheme.

It may be better to take cash and evaluate the options available from among the UTI (UTI Bond Fund) and non-UTI income funds. Investors can park their funds in income funds from a larger universe with a good track record than be straitjacketed into rolling over into a new scheme.

SEBI to decide: The government of India has asked the Securities and Exchange Board of India to decide whether any shortfall in the assured returns schemes of UTI is to borne by the sponsors of UTI. But the UTI has no sponsors, as such. Though the IDBI, the RBI, LIC, Syndicate Bank and SBI had subscribed to the Rs 5 lakh initial capital of UTI, they have taken the position that they are not sponsors of the UTI.

Distancing from UTI: The Government plans to amend the UTI Act to provide for structural changes, give up its powers to appoint the UTI Chairman and distance itself from the UTI so that there is no need for a bail-out package in the event of a crisis. Already, two bail-out packages — running into at least Rs 8,000 crore — have been put in place for US-64. The possibility of a repeal of the Act and a structuring of the UTI on the lines of other mutual funds is also on the cards.

Automatic trigger from UTI: The UTI has decided to introduce an automatic trigger facility in Masterplus, Mastershare, Mastergrowth, Grandmaster, Primary Equity Fund, Master Index Fund, Nifty Index Fund, Index Select Equity Fund and UTI Growth Sectors Fund. Investors can exit or roll over their position as and when units reach a specified NAV or at a specified future date.

CGGF protection: The UTI has indicated that the capital invested in the Children Gift And Growth Scheme and the returns are protected till withdrawal is made by the child on completing 18 years of age. This is available till maturity upon completion of 21 years of age. The guarantee is backed by the UTI's Development Reserve Fund.

No switchover: The UTI has withdrawn the facility to switch across monthly, annual and cumulative options available in MIP 2000 (II) and MIP 2000 (III).

No MIP lock-in: The lock-in period of three years for MIPs launched in 1999, 2000 and 2001 has been removed. Investors can now exit the scheme at NAV-based prices any time.

MEP'99 repurchase: The UTI has announced that a repurchase facility will be available under Master Equity Plan 1999 as the three-year lock-in period has expired. The repurchase will be at 98 per cent of the NAV.

BoI MF show over: Bank of India Mutual Fund has transferred Boinanza Equity Linked Tax Savings Scheme and Boinanza Exclusive Growth Scheme with an asset base of Rs 22 crore to Taurus Mutual Fund. The third scheme, Boinanza 80 CCB Growth cum Tax Savings Scheme, matured on March 31 and is due for redemption.

Zurich Index Funds: Zurich India Mutual Fund is to launch two new schemes in the next few months. These are Zurich Leadership Fund, which will invest in top-rung companies in various sectors, and Zurich India Fund, which will have options tracking the Nifty and the BSE Sensitive Index. SEBI approval has been obtained for the former while it is awaited for the latter. Zurich has assets of Rs 2,095 crore under management.

Canincome: Canbank Mutual Fund plans to launch Canincome, an open-end debt scheme There will be dividend and growth plans. The minimum investment amount will be Rs 10,000. For the automatic repurchase option and bonus option under the growth plan, the minimum investment will be Rs 20,000. Canincome will invest only in debt instruments.

US-64 prices: The repurchase price for unit holdings of up to 5,000 units (enhanced from 3,000 units) will be Rs 10.80 per unit in April under the Special Liquidity Package. This is a rise of 10 paise over the March levels.

The package was offered from August 2001 at Rs 10 per unit and is due to end in May 2003 at Rs 12 per unit.

For holdings in excess of 5,000 units, a repurchase facility linked to the NAV is available from January 2, 2001. For less than 5,000 units, the assured repurchase price for May 2002 is Rs 12 per unit.

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