Financial Daily from THE HINDU group of publications
Sunday, Nov 03, 2002
Markets - Mutual Funds
Columns - Fund Watch
UTI break-up gets under way
S. Vaidya Nathan
THE break-up of the Unit Trust of India (UTI) into two UTI I and UTI II has been pushed through with the Government of India promulgating an ordinance for this purpose. The assets and liabilities of the schemes will be vested in these two entities. UTI-I will take over US-64, assured returns schemes and SUS-99, a scheme introduced to bail out US-64 in 1999.
The entities will be managed by an administrator appointed by the Government. UTI-I will not launch any new schemes. UTI-I will reset the interest and dividend rates of some schemes in line with prevailing levels and may also foreclose some of the assured return schemes with the approval of SEBI.
All the NAV-based schemes will vest with UTI-II, which will have a sponsor company with a capital of Rs 10 crore. This will be owned by LIC, Punjab National Bank, Bank of Baroda and State Bank of India ahead of the planned privatisation. The UTI-II will be a professionally managed fund. The employees of UTI will be employees of UTI-II. The realisation from sale of UTI-II will be transferred to the government. A Bill to replace the ordinance will be issued in the forthcoming session of Parliament.
Income Builder dividend: Franklin Templeton Investments has announced a dividend of 1 per cent for the Income Builder Account. Investors as of October 25, 2002 are eligible for the dividend. For the FT Monthly Income Plan, a dividend of 0.75 per cent has been announced under the Monthly Dividend Option. For the FT Short Term Plan, a 0.6 per cent dividend has been announced for the Monthly Dividend Plan.
Alliance Equity dividend: Alliance Capital Mutual Fund has announced a dividend of 5 per cent of Rs 0.5 per unit for its open-end equity scheme, Alliance Equity Fund. The dividend is for the period ending October 21, 2002. Investors as on October 21 will be entitled to the dividend.
Birla MF dividend: Birla Sunlife AMC has declared a dividend of 0.7 per cent for the Monthly Dividend Plan and Monthly Payment Plan of Birla Monthly Income Plan and 0.65 per cent for Birla Bond Plus - Dividend Plan (Plan A). The record date is October 25.
HDFC load changes: HDFC Mutual Fund has announced that there will be no entry load for HDFC Income Fund for investments of up to Rs 10 lakh. There will be an exit load of 0.5 per cent if redeemed within six months of investment. For investments in excess of Rs 10 lakh, there will be an exit load of 0.25 per cent if funds are redeemed within three months of investment. There will be no load for switching to other schemes.
Birla Bond Plus: Birla SunLife Mutual Fund has announced that the declaration of dividend in Birla Bond Plus (Dividend Plan or Plan A) will be at the discretion of the trustees of the fund. So far, the frequency was monthly, with the last Friday of the month as the record date. Now the fund will periodically announce the record date, and the change is effective October 26.
Birla CIO change: In a significant development, Mr Bharat Shah, the Chief Investment Officer of Birla Mutual Fund, is to leave the company. Mr Bharat Shah was fund manager for the last eight years.
JM bonus plan: JM Mutual Fund has introduced a Bonus Option in the JM G-Sec Fund's Growth Option. The existing capital base will be split between the Bonus Option and Growth Option. The record date for splitting units is November 30. The issue will re-open for fresh investments in the Bonus Option on December 3, close on December 4 and be available on an ongoing basis from December 6 for sale and repurchase.
SEBI directive: The Securities and Exchange Board of India (SEBI) has announced the following rules with regard to directors of asset management and trustee companies of mutual funds:
PruICICI facilities: Prudential ICICI Mutual Fund launched PruICICI InstaCall, which will enable investors to transact over the phone, access their investment account at any time, get NAVs of PruICICI schemes, realign investments by shifting between schemes and change addresses. There is also www.pruicici.com, a transaction website that will enable investors to perform transactions online including buying and selling units and switching holdings and viewing account statements online.
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