UTI Asset Management Company executive director D. S. R. Murthy (centre) in Calcutta on Thursday. Picture by Kishor Roy Chowdhury

Calcutta, April 7: UTI Mutual Fund is waiting for the global investment norms to be relaxed before launching its international fund.

?We will again make a representation to the Securities and Exchange Board of India (Sebi) and the Reserve Bank of India (RBI) and put forth our suggestions on the investment norms,? UTI Asset Management Company executive director D. S. R. Murthy said at the launch of the Dividend Yield Fund.

In May 2004, the country?s largest mutual fund had announced its plan to launch an overseas fund and had entered into an exclusive agreement with State Street Global Advisors (SsgA) for overseas investment advice. It had also filed the draft prospectus with Sebi, but the fund is yet to hit the market. ?The current investment norms allow us to invest in 40-45 stocks and we may chose to invest in just a few of these. This beats the investment philosophy of mutual funds and makes it more in tune with portfolio management services,? said Murthy.

The recommendations provided by UTI include allowing mutual funds to invest in major global indices, said Murthy. Both the regulatory authorities are open to the suggestion and a positive development should take place, he added. UTI Dividend Yield Fund, an open-ended equity-oriented scheme will invest in schemes with high dividend yield potential.

?High dividend acts as a hedge against possible capital erosion. We have identified an universe of 100 stocks, which has a history of paying higher dividends,? UTI Mutual Fund equity fund manager Vinay Kulkarni said.

In the current scenario of corporate earnings growth, stocks that yield higher dividend offer more attractive investment alternatives for sustainable returns, he said.

In the financial year 2004, the average dividend from companies has increased from 20 per cent to 25 per cent.

The scheme is open to resident individuals and institutions as well as NRIs and FIIs, the minimum investment being Rs 5,000.

The fund will charge an entry load of 2.25 per cent for applications less than Rs 25 lakh, 0.5 per cent for investments above Rs 25 lakh but below Rs 2 crore and nil for investments above Rs 2 crore. However, there is no exit load.

The benchmark index for the scheme is BSE 100 and the initial offer will continue from April 11 and will remain open till May 3. The scheme will re-open for continuous sales and repurchase from June 1.