Now, a Leadership Fund from UTI MF

UTI Mutual Fund has launched an open-ended equity diversified scheme, Leadership Equity Fund, which seeks to generate capital appreciation and distribute dividend by investing in stocks that are leaders in their respective sectors.

The new fund offer opens on January 9, 2006 and closes on January 30. UTI has plans to add several more schemes to its product basket in 2006.

The Leadership Equity Fund will invest about 65-100 per cent in companies that are the leaders, while it will invest 0-35 per cent in companies that are the potential leaders in their respective sectors.

UTI AMC chief investment officer AK Sridhar says that the new fund would invest in companies that tend to have higher market shares, better operating efficiencies, better access to capital and sustainable competitive advantage.

Sanjay Dongre, the fund manager of Leadership Equity Fund, adds that according to studies, leaders give good returns in an economic upswing and are also able to withstand economic downswings better than others.

According to the UTI presentation the Indian companies that have the potential to become tomorrow's MNCs include Indian Oil, Reliance Industries, ONGC, SBI, Tata Motors, Tisco, L&T, Maruti Udyog, Hindustan Lever, TCS and Mahindra & Mahindra.

Minimum investment for the Leadership Equity Fund is Rs 5,000 and subsequent minimum investment under a folio is Rs 1,000. It offers the growth and the dividend options.

On an application size of less than Rs two crore, there is an entry load of 2.25 per cent whereas, applications of over Rs two crore carry an exit load of 0.5 per cent, if exited within six months from date of allotment during the new fund offer period. The scheme offers the systematic investment plan. The scheme has been benchmarked against the S&P CNX Nifty.

UTI AMC, the largest mutual fund in the country, has assets under management of Rs 25,200 crore across 55 domestic schemes.