KOCHI: UTI Mutual Fund has announced the launch of a new scheme, "UTI Wealth Builder Fund," which closes on October 11. Units can be purchased only during the new fund offer period, that is, from September 7 to October 11.

The UTI Wealth Builder Fund is a close-ended equity scheme with a maturity period of five years with automatic conversion into an open-ended scheme upon maturity.

The objective of the scheme is to achieve long-term capital appreciation by investing predominantly in a diversified portfolio of equity and equity-related instruments. The scheme will invest in equity and equity-related instruments to the extent of 65 per cent to 100 per cent and 0 per cent to 35 per cent in debt and money market instruments, says a press release.

Addressing a press conference here, Premkumar Nayar, vice-president, UTI AMC corporate office, said the UTI asset management company of the UTI Mutual Fund was able to manage assets to the tune of Rs.35,000 crore so far. It had investor accounts of over 7.5 million under its 60 domestic schemes.

Diversified portfolio

To satisfy the needs of investors who think long-term, UTI Mutual Fund is expanding its product suite. The new scheme aims to build and maintain a diversified portfolio of equity stocks that has the potential to appreciate in the long run. Initially most of the investment will be on infrastructure equities, he said.

V. Srivatsa, fund manager of UTI AMC, who made a presentation, said the mutual fund always endeavoured to provide new wealth creation opportunities to its investors. Apart from being a five-year close-ended equity scheme, it will also utilise derivatives to hedge the portfolio and the extent to which the portfolio will be hedged will be linked to index levels.

N.K.K.V. Menon, chief manager, UTI, Kochi, said the UTI Mutual Fund has a vast network of distribution channels and is in the process of roping in post offices to sell UTI MF instruments. It has also tied up with two regional banks in Kerala - Federal Bank and Catholic Syrian Bank - to broadbase the distribution points and to reach the entire stretch of the State.

Micro-pension scheme

Besides, it is the only mutual fund that is tapping investments from far-flung places such as the Lakshadweep. The micro-pension scheme, recently launched with SEWA bank in Guajrat, is highly popular and the unorganised sector is able to derive benefits out of this pensionary scheme. Talks are on with Kudumbasree for a tie-up in Kerala, he said.

Explaining the detailed aspects of the UTI Wealth Builder Fund, the press release said it was open to resident individuals, institutions as well as to NRIs and FIIs. Face value of units is Rs.10 and purchase price is Rs.10 per unit during the offer period. The scheme will offer redemption/switch out of units on an ongoing basis at half yearly intervals at NAV-based prices. The redemption/switch out will be available only during the specified redemption period, that is first five business days on half yearly basis after the closure of the scheme.

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