UTI to pay 100% on 2 schemes

The Unit Trust of India yesterday created history. Two of UTI Mutual Fund's (UTI MF's) equity schemes""UTI Master Equity Plan 1998 (MRP-98) and UTI Master Equity Plan 1999 (MEP-99)""proposed to pay a 100 per cent dividend each.

This means that UTI will pay an amount equal to the face value of investment in these schemes, while the original investment will remain intact.

The total payout by MEP-98 will be Rs 11.21 crore and by MEP-99 Rs 2.03 crore. This is based on their unit capital on September 30, 2003.

This is the first time in the history of UTI Mutual Fund that any of its schemes is paying a dividend of 100 per cent.

The record date for both the dividends would be December 10, 2003, the mutual fund said. The dividends are tax free. So the post-tax return for investors works out much higher.

Additional benefits under Section 88 of the Income Tax Act are available to investors eligible for tax rebate.

On December 4, 2003, the net asset values of MEP-98 and MEP-99 were Rs 22.62 and Rs 33.84, respectively.

MEP-98 was launched in March 1998 as a close-ended equity-linked savings scheme. It posted returns of 89.13 per cent in the past year.

MEP-99 was launched in January 1999, also as a close-ended equity-linked savings scheme. It had declared a dividend of 15 per cent in February 2000 and October 2000 and 12 per cent in January 2002.

The scheme has delivered 91.08 per cent returns in terms of the net asset value in the past year. In the last six months, 12 equity schemes under UTI MF have declared hefty dividends.

The highest dividend this year before today's announcement was the 40 per cent paid by UTI Master Fund. The Petro Fund paid a dividend of 27 per cent, followed by the Pharma Fund (20 per cent), US 92 (18 per cent), Grandmaster 93, Index equity fund, primary equity fund and MEP US at 15 per cent each.