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UTI Mutual Fund plans to re-enter the equity-based exchange traded fund business with the launch of Nifty and Sensex ETFs on Monday. The two new fund offers will close on Wednesday (August 26) and get listed on stock exchanges on September 3.
Speaking to BusinessLine , Suraj Kaely, Group President, UTI MF, said though there are no specific targets for fund raising through the new ETF issues, the fund house would like to build assets under management (AUM) of ₹25,000 crore under the equity-oriented ETF in the next three years.
Represtation to EPFO, PPFs“We have made presentation with the EPFO and private provident fund trusts to attract part of their incremental fund flow into our ETFs. We are hopeful that they will consider us for investment,” he said.
Currently, UTI Mutual Fund has Gold ETF with AUM of about ₹500 crore. It collected ₹330 crore through the Nifty ETF in 2004, but had to discontinue it after eight years due to lack of liquidity. The mutual fund industry manages equity ETFs worth ₹7,000 crore and gold ETFs for another ₹6,000 crore.
“Investors should not be much worried about the volatility in benchmark indices while investing in Nifty and Sensex ETFs.
“The earnings of corporates that constitute Nifty and Sensex are expected to go up by 15-18 per cent over the next three years with interest rates coming down and the investment cycle reviving,” said Kaely.
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