New Delhi, Feb 23 (UNI) It is a unique, but a wise way of making money in the stock market -- invest in undervalued stocks.
But you must get your decisions right. The UTI Mutual Fund has found a solution with the launch of 'UTI-Contra Fund', which is an opportunity for the retail investor to make money from the currently undervalued stocks.
''Many stocks are undervalued because of emotional and behavioural patterns present in the stock market. The UTI-Contra Fund will bring handsome returns to investors by wisely investing in such stocks,'' UTI Asset Management Company (AMC) CMD U K Sinha told newspersons here.
The fund is an open-ended equity oriented scheme, which aims to provide long term capital appreciation and dividend distribution through investments in listed equities and equity-related instruments.
''The schemes investment policies are based on insights from behaviour finance,'' Mr Sinha said.
The new fund offer opens today and closes on March 22, 2006.
''Considering the present growth path of the Indian equity market, we thought that a fund based on a differential strategy will be best suitable for the investors aspirations and will also complement our product basket,'' he said.
''The fund will select out-of-favour or out of flavour stocks.
Thus the UTI-Contra Fund would not only be contrarian to the majority but also try to identify stocks with intrinsic potential and a good management bandwith,'' Mr Sinha said.
He added that investing in a contrarian manner allows investors to own a portfolio at a bargain price and gain handsomely at the time of value realisation. Buying 'off season' and selling 'in season' would be the correct description of such portfolio management, he said.
Salient features of the UTI-Contra Fund include face value Rs 10 for units, minimum initial investment of Rs 5,000 with subsequent minimum investment under a folio at Rs 1000 and in multiples of Re 1 thereafter with no upper limit.
Besides, the scheme that is open to resident individuals, institutions, as well as to NRIs and FIIs, offers the growth options and the dividend option with payout and re-investment facilities.
The scheme offers Systematic Investment plan without any entry load. No exit load applies if the investor stays in the Fund for more than 2 years from the date of each installment. S&P CNX Nifty is the benchmark index for the scheme.
UTI Mutual Fund, the largest mutual fund in the country, is a SEBI registered mutual fund whose sponsors are State Bank of India, Punjab National Bank, Bank of Baroda and Life Insurance Corporation of India.
It has assets under management of over Rs 25,400 crore and investor accounts of over 6.77 million under its 55 domestic schemes as of January 31, 2006.
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