UTI MF to rejig agent weightage

UTI Mutual Fund is planning to reduce the weightage of agents' contribution to its portfolio substantially.

More than 85 per cent of the inflows in different schemes of UTI comes through agents. Corporate distribution channel accounts for only 10-15 per cent of the inflows.

The fund has already tied up with Indian postal department and six public banks. The biggest mutual fund now wants to alter the corporate distributor agents' ratio in a big way to minimise the elements of volatility.

UTI is planning to increase the contribution of corporate agents to 40 per cent of the total corpus by 2007. On contrary, it would gradually bring down the weightage of agents to 60 per cent of the total corpus.

The corpus of UTI MF as of September 30 is around Rs 20,400 crore and the investor base is around one crore, the second biggest after LIC.

Market experts feel the move is aimed at stability as investors coming from corporate distribution channel seem to be more steady and have a greater appetite for risk taking.

Chief marketing officer, A Bishnoi, said corporate distributors such as foreign banks have customers with whom it has long-standing association.

UTI MF would try to utilise that. According to him, the country's biggest mutual fund has initiated discussions with foreign banks, private banks and brokerage houses for possible tie ups.

"Talks are on with foreign banks such as ABN Amro, BNP Peribus, and Standard Chartered. Besides, we have approached private sector banks such as HDFC Bank, IDBI Bank and UTI Bank," he said.

Bishnoi said UTI MF for the first time might tie up with brokerage houses also for distribution of its schemes. He said the arrangements would be put in place within two-three months.