From THE HINDU group of publications
Sunday, July 08, 2001


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UTI: Sizeable outflows in 2000-01

THE UTI's sales for 2000-01 was Rs 10,143 crore.

Repurchases and redemption were Rs 11,929 crore. The net outflow was Rs 1,886 crore. This is in sharp contrast to the sizeable inflows into private sector funds. The fund placed a big outflow in its flagship fund, US-64. The net outflows were close to Rs 3300 crore. The outflows are also a contrast to the fairly good inflows into UTI in 1999-2000 and larger than the outflows in 1998-99.

This was the year when it was dogged by controversy following the first official admission of troubles in its flagship fund, US-64. Now, in the second such official admission of trouble, the outflows are only bigger.

In 1998-99, the UTI admitted that the reserves of the flagship fund US-64 had turned negative. Now it has not only indicated that possibility, but has also suspended sale and repurchase. The most important is the latter, as it has left investors with no liquidity in the holdings.

According to the UTI's advertisements, the scheme has around two crore investors. Now the UTI has indicated that that number may not be as high on account of multiple holdings. The number of investors is now placed at 45-50 lakh.

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JPC widens UTI probe: The Joint Parliamentary Committee probing the recent stock market scam is likely to look into the troubles dogging UTI schemes. The panel may look into the linkage between price manipulation in the Ketan Parekh stocks and UTI deals in the same period.

UTI dividend: The UTI has declared a dividend of 10 per cent for US-64 (13.75 per cent in 1999-2000). For US-95, a final dividend of 3.5 per cent has been declared, taking the total for the year to 13.5 per cent. The UTI has introduced income distribution options for its Money Market Mutual Fund and the UTI Bond Fund.

Sun F&C dividend: Sun F&C Mutual Fund has announced a dividend for its Monthly Income Plan of 0.8 per cent (or Rs .08 per unit on face value of Rs 10) in the monthly dividend option, and 2.4 per cent (or Rs .24 per unit on face value of Rs 10) in the quarterly dividend option.

The record date for the dividends was June 25, 2001. Sun F&C Monthly Income Plan is an open-ended income scheme for generating regular income (monthly/quarterly distribution) and growth of capital, with no assured return.

Alliance monthly dividend: The Alliance Capital Mutual Fund has declared a dividend of dividend of Re 0.045 per unit or 0.45 per cent in its Monthly Dividend Plan and Re 0.3 per unit or 3.0 per cent in its Quarterly Dividend Plan on the face value of Rs 10. The monthly and quarterly dividends are for the period ended June 29, 2001. The dividends are tax-exempt in the hands of investors. In accordance with the tax provisions in force now, the mutual fund has paid 10.20 per cent distribution tax on the dividends declared. It is not an assured return scheme.

HDFC MF dividend: HDFC Mutual Fund has announced a dividend of Rs 0.30 per unit (tax free for the unitholder). The HDFC Income Fund has assets of Rs 1,565 crore under management. The record date for the dividend was June 28, 2001.

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Reliance load changes: Reliance Capital Mutual Fund has altered the load structure of its income funds. For Reliance Income Fund, the entry load remains nil. The exit load has been fixed at 0.50 per cent for subscriptions up to Rs 1 lakh if redeemed within six months. Beyond this amount, no load is applicable. At present, there is no exit load.

For Reliance Monthly Income Plan, a load of 0.5 per cent has been fixed if redeemed within six months if the amount is less than Rs 1 lakh. Beyond this level, no load is applicable. At present, the exit load is applicable irrespective of the amount in question.

US-64 prices: The Unit Trust of India's flagship fund US-64 is closed for sale and repurchase till December 2001. This is an unprecedented move in the fund's 37-year history. The fund is under book closure and the decision to suspend sale and repurchase has just been announced.

Section  : Mutual Funds
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