UTI targets to net Rs 1000 crore from Gold Fund

Bangalore, Feb 27 (UNI) UTI Mutual Fund, which will be launching its Gold Exchange Traded Fund on March One, has targeted to raise between Rs 800 Crore to Rs 1000 Crore, UTI AMC Senior Vice President S Ganesh said today.

UTI had become the first Mutual Fund firm to come up with gold fund option and had tied up with Nova Scotia Bank as custodian bank for its gold stocks.

"Gold is the ideal hedge against inflation both in the US and India, and the gold fund offered an opportunity to the investors to diversify their portfolio by investing in a new asset class without the hassles of handling the physical asset. Investors can buy and sell as small as one unit of the scheme on National Stock Exhange (NSE) in which the fund would be listed in the first week of April," he added.

He said UTI Gold Exchange Traded Fund was an open fund designed to track the performance and yield of the asset. The scheme would be invested in gold bullion and would reflect the international price of gold in the market based on the London Bullion market at landing price in India.

Investors can invest during the NFO with a minimum amount of RS 20,000 and in multiplies of Re one thereafter. After the NFO, post listing, units could be bought or sold by investors on the NSE.

"Units will be available only in dematerialised form and hence an investor applying for the units is required to have a demat account.

The Unit holders would have the physical possession of gold but it will be in demat form," he added.

In his message, company Chairman and Managing Director U K Sinha said UTI Gold Exchange Traded Fund offered investors a new, innovative, relatively cost efficient and secure way to access the gold market without the necessity of taking physical delivery of gold.

UTI Mutual Fund had assets under management of over Rs 37,000 Crore and investor accounts of over 7.7 million under its 65 domestic schemes as on January 31, 2007.

UNI