Turnaround in US-64 scheme boosts UTI income

By Our Staff Correspondent

MUMBAI, FEB. 28. The Unit Trust of India (UTI) has announced a much higher net income of Rs. 6,046 crores for the half year ended December 31, 1999 against Rs. 1,778 crores in the corresponding period in the previous year, an increase of 240 per cent. This has been attributed largely to the turnaround in the Unit Scheme - 64 whose net income increased by almost 200 per cent to Rs. 1,189 crores.

Aggregate investible funds of UTI during the period increased to a market value of Rs. 72,698 crores (Rs. 48,092 crores). Its reserves and surplus stood at Rs. 8,716 crores against a negative Rs. 661 crores in December 1998 and Rs. 1,492 crores in June 1999. The reserves and surplus position is after income distribution of Rs. 4,120 crores made during January-June 1999 and Rs. 785 crores in July-December 1999. Unit capital under all schemes increased by 15 per cent to Rs. 55,619 crores (Rs. 48,404 crores).

The investible funds of US-64 have increased by over 60 per cent to Rs. 19,923 crores as on December 31, 1999 from Rs. 12,433 crores in the same period in the previous year. ``The US-64 scheme has travelled a long way since 1998, when it had negative reserves arising from depreciation in the value of equities. But it has emerged stronger following the continuous improvement in the capital market coupled with measures taken by us to restructure our portfolio and proactive fund management.'' said Mr. P. S. Subramanyam, Chairman, UTI. Thus, the reserves and surplus position is of Rs. 3,581 crores against a negative Rs. 2,597 crores last year.

The equity portfolio of US-64 has been restructured by increasing exposure in growth sectors, namely, information technology, media and pharma. The exposure to these sectors has increased by 17 per cent from 9 per cent to 26 per cent during the year.

During 1999, several equity funds were launched by UTI including five growth sector funds including software fund, pharma and healthcare fund, petro fund, services fund and brand value fund.

Also, in pursuance of UTI's revised policy of income distribution in order to create increasing value to its large investor base, UTI has announced an income distribution of 20 per cent each under UGS 10000 and GSF-Services Sector Fund. It had earlier in the year announced income distribution under Masterplus (12 per cent), Mastershare (16 per cent), Mastergrowth (15 per cent), MEP'99 (15 per cent) and GSF-Software Fund (20 per cent).

The 49 income-oriented schemes of UTI have performed well and aggregate investible funds under management rose to Rs. 39,527 crores (Rs. 26,226 crores). Reserves and surplus rose to Rs. 4,424 crores (Rs. 1,093 crores) and net income under all schemes for the half year ended December 31, 1999 was Rs. 3,187 crores (Rs. 1,295 crores). Portfolio appreciation as on December 31, 1999 was Rs. 2,400 crores.

The Chairman of UTI said the framework for the stock lending scheme was ready and the Securities and Exchange Board of India (SEBI) guidelines in this regard were awaited. Also, for hedging its exposure in the stock market, it would consider using derivatives as and when they would be available to mutual funds.

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