Financial Daily from THE HINDU group of publications
Thursday, Nov 13, 2003
UTI set to renew focus on offshore funds
Abu Dhabi , Nov. 12
UNIT Trust of India, which registered a big growth in business in the UAE and Gulf over the past year, is renewing its focus on offshore funds.
It plans to launch an attractive capital guaranteed fund for NRIs and other offshore investors in less than a month.
Mr M. Padmanabhan, Vice-President, GCC region, who is based at UTI's Dubai representative office, told Business Line that in view of the tremendous interest in offshore funds, UTI is renewing its focus on such funds. The details for a capital guaranteed fund to be launched in three to four weeks time is being finalised.
The size of the issue will be $20 million and details regarding minimum investment, returns and the name of the fund etc are being worked out. The fund will be attractive to big and small investors, and NRIs in the Gulf and other countries have shown a lot of interest in the upcoming scheme, he said.
The dollar-based fund will be for a period of five-and-half to six years, but a good exit option is also being worked out. Around 60 to 70 per cent of the new fund's assets would go into UTI's successful Master Plus scheme and a European bank will provide the capital guarantee. Safety measures would also be taken in case of any sharp volatility in the Master Plus scheme, he said.
UTI's NRI clientele in the Gulf has been growing and it has doubled its business in the UAE over the past year. There has a been a 15 to 20 per cent growth out of the Dubai office alone with a substantially larger growth overall in the Gulf region.
The trust is in the process of exploring tie-ups in other Gulf states to widen its network base in the region, Mr Padmanabhan added. In view of the strong interest in offshore funds, it is also looking at bringing down the minimum investment amount for its successful dollar denominated India IT Fund to cater to retail demand.
This fund is positioned in Europe, but a lot of investors in the Gulf and elsewhere have also shown interest in view of its strong growth and tax efficiency. The trust's pound sterling denominated India Fund has also registered a 67 per cent growth in the past year. More products for NRIs are also in the offing in view of the positive feedback to UTI's schemes overseas, Mr Padmanabhan said.
NRI customers have been investing in a wide range of UTI products with both fixed income and equity based schemes eliciting a good response.
"Investors are more careful now after market fluctuations affected returns on two or three occasions. They watch their equity investment more carefully and we are also urging them to invest and book profits regularly to maximise benefits," he said, adding that the trust had handed out the maximum number of dividends over the past year. Even in the fixed income category, UTI's schemes are still offering a better return than other rupee denominated options following a big slash in interest rates in recent months, he added.
Stories in this Section
The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription
Group Sites: The Hindu | Business Line | The Sportstar | Frontline | The Hindu eBooks | Home |
Copyright © 2003, The
Hindu Business Line. Republication or redissemination of the contents of
this screen are expressly prohibited without the written consent of
The Hindu Business Line