Hyderabad, Oct 23 (UNI) Looking at exploiting the market volatility, UTI Mutual Fund today announced the launch of a unique scheme 'UTI Wealth Builder Fund-Series II', which combines the benefits of both equity and gold, targetting to raise Rs 700 crores from the product.
''The investment objective of the fund is to achieve long-term capital appreciation by investing predominantly in a diversified portfolio of equity and equity-related instruments along with investments in Gold ETFs and Debt and Money Market instruments,'' UTI AMC Country-Head (Sales) D Mohanty said.
'UTI Wealth Builder Fund-Series II' is an open-ended equity oriented scheme. The New Fund Offer closes on November 19, 2008 and the scheme will re-open for purchase and redemption not later than 30 days from the closure of the NFO period.
Mr Mohanty said the scheme is ''the First of its kind in the mutual fund industry to offer an asset allocation which combines traditional as well as non-traditional asset class - Equity and Gold.
It is important to have an alternative asset in one's portfolio and to build a portfolio around assets that have low correlation, he said and added 'Gold has proved to be ''counter cyclica'' or low correlated asset class as compared to equity investments and has generally been considered as a safe haven during times of economic upheavals and volatile equity markets'.
Investors, for first time, will have the convenience of investing through SIP that will have a exposure to Gold ETF. The fund is expected to raise between Rs 500 to Rs 700 crores and will invest 65 per cent in equities, particularly FMCGs and pharma, and a maximum of 35 per cent in gold. It had raised Rs 3,300 crores from its last NFO and had keen paying 22 per cent dividend on its products over last 22 years.
UTI AMC Fund Manager Lalit Nambiar said the scheme aims to build and maintain a diversified portfolio of equity stocks that has potential to appreciate in the long run. The scheme will take exposure across capitalisations with a tilt towards large caps and will also use derivatives to hedge and manage volatility. The investment in Gold ETFs will diversify portfolio risk and reduce overall volatility of returns.
The plan is open to resident individuals, institutions as well as to NRIs and FIIs. During the NFO, the units will be sold at face value of Rs 10 plus applicable load. The scheme will offer redemption of units at NAV based prices on every business day on an on-going basis not later than 30 days from the date of closure of the NFO period.
UNI DB AKM 1604