UTI MF plans second Dow scheme

The fund's application to launch the Global Titans Index fund is pending with Sebi

UTI Mutual Fund (UTIMF) will seek the Securities and Exchange Board of India's (Sebi) approval soon to launch a scheme which will invest in the constituents of the Dow Jones Sustainability index.

A formal application in this regard will be submitted to the Sebi shortly, officials said.

The fund house already has an application pending with the regulator to launch the Global Titans Index fund, which will invest in the Dow Jones Global Titan Index.

A K Sridhar, executive director of UTIMF, said, "Once that scheme gets the clearance, then our second scheme will stand automatically approved. The problem with the Global Titans Index Fund is that the investments will be in companies which do not have a 10 per cent equity stake in any Indian listed company. Under current regulations investments are permitted only in those foreign companies which have a minimum 10 per cent stake in a company listed in India."

Some of the companies which comprise the Dow Jones Sustainability index are Toyota Motor, Westpac Banking Corp, Alcan Inc, DSM NV, AMEC plc, Koninklijke (Royal) Philips Electronics Statoil, British Land Plc, Unilever, Novozymes A/S, 3M Company, Swiss Reinsurance, Pearson PLC Procter & Gamble Co, Marks & Spencer PLC, Intel Corp, BT Group Plc, Severn Trent Plc among others.

Among these, only a handful would have investments in an Indian listed company.

Launched in 1999, the Dow Jones Sustainability index is the first global index to track the financial performance of the leading sustainability-driven companies worldwide.

Corporate sustainability and investment sustainability are the main parameters for the index. Corporate sustainability is a business approach that creates long-term shareholder value by embracing opportunities and managing risks deriving from economic, environmental and social developments. Corporate sustainability performance is an investable concept.

The Dow Jones Sustainability World Index (DJSI World) consists of more than 300 companies that represent the top 10 per cent of the leading sustainability firms in 60 industry groups in the 34 countries covered by the biggest 2,500 firms in the Dow Jones Global Index.

Meanwhile, UTIMF on Tuesday announced a tie-up with HDFC Bank - the fund's seventh such tie-up - for distributing its products.

Targetted mainly at urban and metropolitan customers, the bank has the mandate to bring in more than Rs 5,000 crore worth of assets in the first year.