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New UTI stock fund romps home

Mumbai, July 11: Flush with the success of its liquid fund, UTI Mutual Fund today netted close to Rs 400 crore in its new plan called SUNDER óan acronym for S&P CNX Nifty UTI Notional Depository Receipt. It is an exchange traded fund (ETF) of the kind popular in the markets of Europe and America.

Exchange-traded funds are like index funds but can be traded on bourses like a share. Analysts say they score over index funds in matters of liquidity and flexibility. The success of SUNDER comes close on the heels of UTIís liquid fund, which mopped up close to Rs 1,000 crore.

In India, Unit Trustís ETF, which tracks the movement of NSEís Nifty, is the fifth such instrument, but the first for the mutual fund major.

Garnering a sum close to its Rs 400-crore target is significant for UTI since similar schemes floated by ICICI Prudential and Benchmark grossed less than Rs 50 crore.

ETFs are different from index funds in that they are merely 1/100 of the value of an index. So if the Nifty closed at 1161.65 points today, a SUNDER unit will be available for Rs 116.16 on bourses.

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