UTI Mutual Funds creates segregated portfolio of Vodafone Idea investment

Our Bureau Mumbai | Updated on February 18, 2020

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Exposure of Rs 180 crore in 5 schemes hit

The crisis in credit risk funds of mutual funds seems to continue.

Investments worth ₹186 crore in debt instruments issued by Vodafone Idea in five of the schemes of UTI Mutual Fund have turned doubtful, leading to creation of segregated portfolio.

Care Rating has downgraded the debt instruments of Vodafone Idea to ‘BB-’ (i.e. below investment grade) on February 17.

The five schemes in which segregated portfolios have been created include UTI Credit Risk Fund, UTI Bond Fund, UTI Regular Savings Fund, UTI Dynamic Bond Fund and UTI Medium Term Fund.

Upon recovery of money from Vodafone Idea in the segregated portfolio, it will be distributed to investors in proportion to their holdings in the segregated portfolio, said UTI MF in a statement.

Existing investors in these schemes, as of the day of creation of the segregated portfolio, shall be allotted an equal number of units in the segregated portfolio as those held in the main portfolio. No subscription or redemption will be allowed in the segregated portfolio of the schemes, it added.

Investors redeeming their units will get redemption proceeds based on the NAV of the main portfolio and will continue to hold units of the segregated portfolio.

Investors subscribing to the schemes afresh will be allotted units only in the main portfolio based on its NAV.

UTI Asset Management Company will enable listing of units of segregated portfolio on recognised stock exchanges within 10 working days of the creation of the segregated portfolio and enable transfer of such units on receipt of transfer requests.

The fund house will disclose separate NAVs of the segregated and main portfolios from the date of creation of the segregated portfolio.

It will also send a separate account statement indicating the units held by the investors in the segregated portfolio along with the NAV of both the segregated portfolio and the main portfolio as of the day of the credit event to the investors within five working days of creation of the segregated portfolio.

Published on February 18, 2020

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