UTI MF to promote low-key plans

Fund house to focus more on organised institutional distribution network

UTI Mutual Fund has decided to put in place a campaign to push three of its low-profile schemes, the Variable Investment Scheme, Children's Career Plan and Retirement Plan.

The Variable Investment Scheme, the only product of its type in the sector, is a unique scheme since the level of its equity investment is dictated by the level of the stock market index.

Ashutosh Bishnoi, chief marketing officer at UTI MF said that the scheme had not been sufficiently understood by investors and the distributors were also not selling it properly.

"We have to push the product and create more awareness," he said, adding that rather than a plain equity fund, where everything is left to the discretion of the fund manager, this particular scheme ensures some method in its transactions in the market.

"Of course the returns will be much more modest than in a normal scheme," he pointed out. The scheme is structured in such a way so that when the market is going up the scheme starts selling its equity holdings and shifts to debt and when the market goes down, the scheme starts buying equities.

Of course, there are various index levels at which the sales and purchases are triggered, depending on the range in which the market is traded at any point of time. At present, the corpus of the scheme stands at Rs 72 crore and the bulk of it is retail money.

Children's Career Plan is a balanced fund with a corpus of Rs 1,600 crore. Bishnoi said that the plan was to go to schools and talk to the children regarding the plan and tell them how it could help in their careers financially.

"We are talking to schools in Mumbai and Delhi," he said, adding that the response from the schools was very encouraging. "They are quite enthusiastic about the prospect of UTI MF going to their schools and talking to the children."

He said that they might look at a tie-up with schools but that would happen at a later stage. The idea behind the efforts is to appeal to the children who in turn might be able to influence their parents.

While the talks with children will not contain any heavy stuff on the investment patterns, it will focus on what the scheme could mean in terms of their education taken on a long term basis. The scheme, incidentally, has given a return of 34 per cent over the last one year, on a compounded basis.

UTIMF sells most of its schemes through local agents, than through the more organised institutional distributor network. UTIMF is planning to tap more of the latter to sell its specialised products.

The fund house also sees a need to push the Retirement Plan. "This is a segment of the population which is not addressed properly, but they are the ones who need right investment vehicles," Bishnoi said.