The Hindu : Business : UTI MF launches new scheme

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Wednesday, Apr 06, 2005

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Business

UTI MF launches new scheme

MUMBAI, APRIL 5. UTI Mutual Fund has launched a dividend yield fund to provide medium to long-term capital gains and dividend distribution to investors by investing predominently in equity and equity oriented instruments.

The initial offer period for the scheme would open for subscription on April 11 and close on May 3. It would reopen for continuous sales and repurchase from June 1, UTI Asset Management Company's Chairman, R. H. Patil, told reporters here today.

The market had become more volatile and now small investors should rely on expertise of fund managers like mutual funds, Mr. Patil said.

UTI MF chief investment officer, A. K. Shridhar, said the dividend yield scheme planned to have up to 70 stocks in the portfolio and minimum 65 per cent of the assets would be invested in high dividend yield shares.

The BSE-100 would be benchmark index for the scheme. However, it would invest in stocks based on yield, management and sector parameters, he said. The high dividend acted as a hedge against possible erosion and indicated corporate confidence in sustaining earnings growth, he said.

Ownership issue

The scheme would offer two options — growth option and dividend option — with re-investment facility. The applications up to Rs. 25 lakhs would attract entry load of 2.25 per cent, Mr. Sridhar added.

The Government will play a crucial role in firming up the ownership of UTI AMC and a clear picture is expected to emerge by the end of March next year.

— PTI

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