UTI shuffles US-64 portfolio

MUMBAI DEC. 27. The Unit Trust of India today announced amendments to the US-64 scheme with effect from January 1, 2002. It also decided to change the investment pattern of the US-64 corpus.

As the UTI's flagship scheme goes NAV-based on January 1, it will re-open for sale and re-purchase from the same day. At present there is limited re-purchase option and sale of US-64 units is closed.

Under the revised investment pattern for US-64, the fund will invest up to 75 per cent of the assets in debt instrument while the investment in equity will vary between 25 (minimum) and 55 per cent (maximum). At present 61 per cent of the assets under the management of the scheme is in equities and the balance in debt instruments including government securities and money market instruments.

The exposure in the equity would be brought down in line with the investment pattern before June 30, 2003. The US-64 would also investment in derivatives, overseas investment and stock lending.

For investments in corporate debt, the minimum rating would be of ``AA'' grade. Of this, at least 7.5 per cent investment would be in government securities. For the income option of US-64, there will be a provision for payment of income distribution or reinvestment of income distribution at NAV based price. Under the growth option, no income distribution will be paid out but the income will be ploughed back and reflected in NAV. This option will have a separate NAV, after next payment of income distribution/reinvestment.

The scheme will also provide investors with income and growth options with minimum investment of Rs. 5,000 and subsequent minimum investment of Rs. 1,000 per folio. The UTI has also provides US-64 investors to switchover from income to growth option and vice versa at respective NAV. Existing investors will be considered under income option unless they specially opt for growth option.

The sale of the units of US-64 will be at a price not exceeding 103 per cent of NAV. However, repurchase price will vary. Repurchase within one year will not be below 97 per cent of NAV. From one year to two years, repurchase will be at 98 per cent of NAV and between two and three years at 99 per cent of NAV. After three years of investment, the repurchase will be at NAV.

The UTI also said that partial repurchase under a folio has to be for a minimum of Rs. 1,000 provided the outstanding balance in the folio after such repurchase is not less than Rs. 5,000.

The US-64 will follow the SEBI prescribed limit for contribution of 0.25 per cent to DRF and 0.10 per cent to staff welfare fund. The provisions applicable for US-64 will also be the governing provision for the existing investments made in the Re-investment Plan 1966 and Children's Gift Plan 1970 unless otherwise specified.