The Unit Trust of India's (UTI) investible funds declined to a five-year low in May 2001. Data provided by the Association of Mutual Funds in India (Amfi) shows that investible funds or assets under management with UTI dipped to Rs 57,684 crore in May 2001 from an all-time peak of Rs 76,547 crore in March 2000.+
Indeed, the diminution in UTI's investible funds -- the corpus made up of unitholders' subscriptions -- can be directly traced to the decline in market indices following the meltdown in ICE (information, communication and entertainment stocks) off their highs in early 2000.
As a result of redemption and decline in fresh inflows, the assets under UTI management declined by Rs 18,863 crore from the peak.
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The large exodus in the UTI's investors base and assets begins immediately after UTI announced a lower rate of dividend at 13.75 per cent in its flagship scheme US-64.
As a result the assets in July 2000 declined to Rs 69,204 crore from Rs 75,159 crore in June 2000.
As the decline in the market value of new economy stocks continued, the assets under UTI fold declined further by nearly Rs 5,000 crore during next two months.
As at the end of October 2000, UTI's assets fell to Rs 62,706 crore. As the market looked up between November 2000 and January 2001, the assets perked up again to Rs 66,278 crore in January 2001.
The assets dipped immediately after the budget and in four month's time the asset base declined by Rs 8,600 crore to Rs 57,684 crore in May 2001.
During the first 11 months of UTI's financial year 2000-01 (July-June), its sale of units aggregated Rs 8,160 crore. During the same period, the redemption of units was higher at Rs 10,718 crore. In May 2001, the outflow was higher by Rs 1,925 crore.