UTI launches two equity ETFs, looks to tap EPFO funds

With an eye on the cash-rich Employees Provident Fund Organisation (EPFO), UTI Mutual Fund today launched two new open-ended exchange-traded funds - UTI Nifty ETF and UTI Sensex ETF.
The New Fund Offers (NFOs) which opened today will remain open for subscription till August 26 and will be traded on both the exchanges from September 3.
Currently, SBI MF is the only fund house which has an approved equity ETF while LIC Nomura MF has applied for five such funds.
The EPFO, largest institutional investor into equities after LIC, sits on around Rs 6.5 trillion, contributed by its over 6 crore subscribers. The retirement fund body is now set to invest around Rs 5,000 crore in equity ETFs by fiscal-end, of its total annual investible fund of around Rs 1 trillion.

To begin with, EPFO has chosen two index-linked ETFs -- SBI Nifty ETF and SBI Sensex ETF -- to invest from August 6.
The UTI Nifty ETF will invest in securities which are constituents of Nifty, whereas UTI Sensex ETF will invest in securities which are constituents of the Sensex. Both will be investing in money market instrument in accordance with the asset allocation pattern.

"Both of our ETFs, which were launched today, are approved ones and now it's up to the EPFO to decide the quantum of its investment into them, though we are already in talks with them for the same," Suraj Kaeley UTI AMC President for sales and marketing told PTI.

"ETFs launched by UTI are well suited for institutions and PF trusts who over a period of time will benefit from the growth in the Indian economy," he added.
"We have filed for five equity ETFs which include Junior Nifty, Nifty, CNX 100, CNX Banking and Sensex and we are already in talks with EPFO for investing in these funds," Saroj Dikhale LIC Nomura MF MD and Chief Executive said.