The Hindu Business Line : We have been targeting sticky money: UTI Mutual

UTI Mutual Fund will intensify its search for more equity assets, says Mr U.K. Sinha, CMD. He shares with Business Line UTI MF's plans to play a more critical role, especially in areas that not all fund management companies will foray into in a hurry.

He also answers queries related to a few other issues, including the mandate given to a management consultant.

Excerpts.

A few of the other players in the asset management business seem to be catching up with UTI MF. Your comments.

We are not keen to know who holds the No 1 or No 2 position. Instead, the plan is to extend our position as a fund house with a significant range of operations. Here, we are including subsidiaries and some of our other ventures as well.

In the backdrop of rising investor expectations and volatility in the market, business for us can become bigger and more diverse if investors become aware of mutual funds and their potential.

You mandated Boston Consulting Group to create a recast strategy. Any developments?

Yes, BCG has been asked to study various aspects of the MF industry, including its growth trends. We hope to use this as a tool to consolidate the UTI MF brand here in India and globally as well. As you know, our operations involve different components like marketing, fund accounting and research. The research capability we have is quite broadbased in nature.

We hope to leverage this further. Fund accounting too is a vital area. Running so many NAVs every day throws up challenges of their own.

You wanted to take Retirement Benefit Pension Plan to the grassroots. Has that happened?

We have recently tied up with Bank of India for RBPF. The bank has financed a good number of SHGs. Roughly 1,000 applications have been collected so far. In fact, UTI MF is talking to a few other institutions for similar arrangements. I cannot name all of them at this stage.

We did this earlier with Shri Mahila Sewa Sahakari Bank. I understand this has not been a glamorous exercise, one that will catch popular fancy. Not all sections of the asset management industry may be expected to take up such programmes. But this does take the concept of retirement savings down to very low levels.

Your PMS business is not making much headway. How do you view this?

While PMS is a relatively new area for us, the assets under management are growing. Agreed, the growth is slow here. Unlike some of the others, we do not have the benefit of a bank or a financial services company to assist our efforts. However, let me tell you that from the point of view of returns, performance has been encouraging. Also, we expect a few big-ticket allocations.

Have you been able to retain equity assets after the markets dipped in May?

Equity already accounts for a sizeable part of our overall assets. A very large portion comes by way of contributions by small investors, who are not accustomed to seeing NAV tables every day and pulling out every now and then.

What we have been targeting is sticky money and this has stayed with us. Getting huge amounts into liquid funds at the end of the month is not in line with our objective.

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