Description
this is an information about the UTI MUTUAL FUNDS i was unable to make the edequate understandable data so after huge efforts i made this.
Overview of Unit Trust of India(UTI)
The Unit Trust of India or UTI was established on 1st February, 1964 under the Unit Trust of India Act, 1963 by the government of India. Its establishment has been a landmark in the history of investment trusts in India. It completed 35 years on 30th June, 1999. The UTI started the sale of units to the public from the July,1964. Unit Trust of India was created by the UTI Act passed by the Parliament in 1963. For more than two decades it remained the sole vehicle for investment in the capital market by the Indian citizens. In mid- 1980s public sector banks were allowed to open mutual funds. The real vibrancy and competition in the MF industry came with the setting up of the Regulator SEBI and its laying down the MF Regulations in 1993.UTI maintained its per-eminent place till 2001, when a massive decline in the market indices and negative investor sentiments after Ketan Parekh scam created doubts about the capacity of UTI to meet its obligations to the investors. This was further compounded by two factors; namely, its flagship and largest scheme US 64 was sold and re-purchased not at intrinsic NAV but at artificial price and its Assured Return Schemes had promised returns as high as 18% over a period going up to two decades. As of 2010, UTI has 10 million investors. UTI Bank was the first of the new private banks to have begun operations in 1994, after the Government of India allowed new private banks to be established. The Bank was promoted jointly by the Administrator of the specified undertaking of the Unit Trust of India (UTI - I), Life Insurance Corporation of India (LIC) and General Insurance Corporation Ltd. The Bank today is capitalized to the extent of Rs.232.86 Crores with the public holding at 47.50 %. Fearing a run on the institution and possible impact on the whole market Government came out with a rescue package and change of management in 2001.Subsequently, the UTI Act was repealed and the institution was bifurcated into two parts .UTI Mutual Fund was created as a SEBI registered fund like any other mutual fund. The assets and liabilities of schemes where Government had to come out with a bail-out package were taken over directly by the Government in a new entity called Specified Undertaking of UTI, SUUTI. SUUTI holds over 27% stake Axis Bank. In order to distance Government from running a mutual fund the ownership was transferred to four institutions; namely SBI, LIC, BOB and PNB, each owning 25%. Certain reforms like improving the salary from PSU levels and effecting a VRS were carried out UTI lost its market dominance rapidly and by end of 2005,when the new share-holders actually paid the consideration money to Government its market share had come down to close to 10%! A new board was constituted and a new management inducted. Systematic study of its problems role and functions was carried out with the help of a reputed international consultant. Fresh talent was recruited from the private market, organizational structure was changed to focus on newly emerging investor and distributor groups and massive changes in investor services and funds management carried out. Once again UTI has emerged as a serious player in the industry. Some of the funds have won famous awards, including the Best Infra Fund globally from Lipper. UTI has been able to benchmark its employee compensation to the best in the market, has introduced Performance Related Payouts and ESOPs. The UTI Asset Management Company has its registered office at: UTI Tower, Gn Block, Bandra — Kurla Complex, Bandra (East), Mumbai - 400 051.It has over 70 schemes in domestic MF space and has the largest investor base of over 9 million in the whole industry. It is present in over 450 districts of the country and has 100 branches called UTI Financial Centres or UFCs. About 50% of the total IFAs in the industry work for UTI in distributing its products! India Posts, PSU Banks and all the large Private and Foreign Banks have started distributing UTI products. The total average Assets Under
Management (AUM) for the month of June 2008 was Rs. 530 billion and it ranked fourth. In terms of equity AUM it ranked second and in terms of Equity and Balanced Schemes AUM put together it ranked FIRST in the industry. This measure indicates its revenue- earning capacity and its financial strength. Besides running domestic MF Schemes UTI AMC is also a registered portfolio manager under the SEBI (Portfolio Managers) Regulations. It runs different portfolios for is HNI and Institutional clients. It is also running a Sharia Compliant portfolio for its Offshore clients. UTI tied up with Shinsei Bank of Japan to run a large size India-centric portfolio for Japanese investors. For its international operations UTI has set up its 100% subsidiary, UTI International Limited, registered in Guernsey, Channel Islands. It has branches in London, Dubai and Bahrain. It has set up a Joint Venture with Shinsei Bank in Singapore. The JV has got its license and has started its operations. In the area of alternate assets, UTI has a 100% subsidiary called UTI Ventures at Banglore This company runs two successful funds with large international investors being active participants. UTI has also launched a Private Equity Infrastructure Fund along with HSH Nord Bank of Germany and Shinsei Bank of Japan. Objects The basic objective of the UTI is to offer both small and large investors the means of acquiring shares inn the widening prosperity resulting from the steady, industrial growth of the country. There are two primary objectives of UTI, i.e., (i) to promote and pool the small savings from the lower and middle income people who cannot have direct access to the stock exchange, and (ii) to give them an opportunity to share the benefits and fruits of prosperity resulting from rapid industrialization in India. Functions The main functions of UTI are as follows: ? To encourage savings of lower and middle-class people. ? To sell units to investors in different parts of the country. ? To covert the small savings into industrial finance. ? To give them an opportunity to share the benefits and fruits of industrialization in the country. ? To provide liquidity to units. ? Review of Progress (Operations) The UTI has made good progress during the last 35 years. Bulk of the resources mobilized by the UTI have been deployed in the corporate sector. The UTI gives preference to the securities of new companies as to investments. The UTI invests its funds in government securities. Its operations as to sanction and disbursement of loans during the last few years are given in the table below: Sanction and Disbursement of Loans by UTI The total investments of JJTI on 30th June, 1998 stood at Rs. 59,600 crores. i.e., 1997-98, the UTI collected a record sum of Rs. 13.700 crores in its various schemes as against Rs. 9.800 crores in 1996-
97. The most popular schemes of UTI is UJP64 under which the UTI earned a record sum of Rs. 3,170 crores as against Rs. 2,600 crores in 1996-97. The rate of dividend under this scheme in 1997-98 was 20%. The income from dividends in the hands of investor is totally exempted from income-tax. Critical Evaluation The, UTI operations have been on increase as is evident from the above table. However, the UTI is not free from criticisms and charges which are given below: ? The UTI has been charged with the lack of transparency in its operations. ? The UTI has been operating within the walls of protection provided to it by the Unit Trust Act, 1963. As such, the UTI has not been subject to any regulation from various statutory bodies including the SEBI. ? The UTI has been manipulated by vested interests to effect the transactions on the stock exchanges. ? The UTI has been accused of corruption at various levels. ? Investors do not possess the right to attend the annual general meetings of the trust. ? The expense ratio of the UTI is quite high. ? Investors do not get benefits of the capital appreciation of the investments made by them. ? The pricing policy of the UTI is open for criticism. ? The operations of the UTI fall much short of the standards of efficiency. ? The investors are not getting adequate return on their investments. In spite of the above criticisms, the UTI has emerged as a leading financial institution of India. It has been successful in propagating the unit culture in the country and has offered alternative lucrative channels of investment to small savers. THE UNIT TRUST OF INDIA ACT, 1963 Title : THE UNIT TRUST OF INDIA ACT, 1963 Year : 1963 Act : POWERS AND FUNCTIONS OF THE TRUST 19.Business of Trust. Subject to the provisions of this Act and the regulations made under section 43, the Trust may carry on and transact any of the following kinds of business in India, namely
1) selling and purchasing units; (2) investing in, and acquiring, holding or disposing of, securities and exercising and enforcing, all powers and rights incidental thereto including protection or realisation of such investment and the taking over of the administration of any property offered as security for such investment; (3) granting of loans and advances upon the security of any movable or immovable property or otherwise;accepting, collecting, discounting, rediscounting, purchasing, selling or negotiating or otherwise dealing with, any bills of exchange, hundies, promissory notes, coupons, drafts, bills of lading, railway receipts, warehouse receipts, documents of title to goods, warrants, certificates, scrips and other mercantile instruments; (5) purchasing, selling or issuing participation certificates in relation to any loan or advance granted by any public financial institution or scheduled bank or such other institution as may be prescribed;
(6) keeping money on deposit with companies or other bodies corporate, scheduled banks or such other institutions as may be prescribed; (7) investing in any special paper or security floated by the Central Government or the Reserve Bank or by any such foreign government or foreign bank as may be prescribed; (8) formulating in relation to any unit scheme,(a) savings and life insurance plan or plans under which a person may acquire an interest in units in association with or as the agent of, the Life Insurance Corporation or the Central Government, but not including the life insurance business; (b) savings and insurance plan or plans under which a person may acquire an interest in units in association with or as the agent of, the General Insurance Corporation but not including the general insurance business; or (c) any other plan or plans, under which a persons may acquire an interest in units; (9) acquiring immovable property or any interest therein, the development (including construction) and sale of such property and the rendering of financial and other assistance to any person for the acquisition of any immovable property or any interest therein and for the development (including construction) of such property; (10) providing leasing and hire purchase finance to persons, companies, and other bodies corporate; (11) providing merchant banking and investment advisory services; (12) extending investment or fund or portfolio management services to persons resident outside India; (13) opening of an account or the making of an agency arrangement with a bank incorporated outside India; (14) buying or selling of, or entering into such other dealings in, foreign exchange, as may be necessary for the discharge of its functions; (15) doing any other kind of business connected with mobilization of savings or investments which the Central Government may authorize; (16) generally, doing all such acts and things as may be incidental to or consequential upon the discharge of its functions under this Act.
doc_868463073.doc
this is an information about the UTI MUTUAL FUNDS i was unable to make the edequate understandable data so after huge efforts i made this.
Overview of Unit Trust of India(UTI)
The Unit Trust of India or UTI was established on 1st February, 1964 under the Unit Trust of India Act, 1963 by the government of India. Its establishment has been a landmark in the history of investment trusts in India. It completed 35 years on 30th June, 1999. The UTI started the sale of units to the public from the July,1964. Unit Trust of India was created by the UTI Act passed by the Parliament in 1963. For more than two decades it remained the sole vehicle for investment in the capital market by the Indian citizens. In mid- 1980s public sector banks were allowed to open mutual funds. The real vibrancy and competition in the MF industry came with the setting up of the Regulator SEBI and its laying down the MF Regulations in 1993.UTI maintained its per-eminent place till 2001, when a massive decline in the market indices and negative investor sentiments after Ketan Parekh scam created doubts about the capacity of UTI to meet its obligations to the investors. This was further compounded by two factors; namely, its flagship and largest scheme US 64 was sold and re-purchased not at intrinsic NAV but at artificial price and its Assured Return Schemes had promised returns as high as 18% over a period going up to two decades. As of 2010, UTI has 10 million investors. UTI Bank was the first of the new private banks to have begun operations in 1994, after the Government of India allowed new private banks to be established. The Bank was promoted jointly by the Administrator of the specified undertaking of the Unit Trust of India (UTI - I), Life Insurance Corporation of India (LIC) and General Insurance Corporation Ltd. The Bank today is capitalized to the extent of Rs.232.86 Crores with the public holding at 47.50 %. Fearing a run on the institution and possible impact on the whole market Government came out with a rescue package and change of management in 2001.Subsequently, the UTI Act was repealed and the institution was bifurcated into two parts .UTI Mutual Fund was created as a SEBI registered fund like any other mutual fund. The assets and liabilities of schemes where Government had to come out with a bail-out package were taken over directly by the Government in a new entity called Specified Undertaking of UTI, SUUTI. SUUTI holds over 27% stake Axis Bank. In order to distance Government from running a mutual fund the ownership was transferred to four institutions; namely SBI, LIC, BOB and PNB, each owning 25%. Certain reforms like improving the salary from PSU levels and effecting a VRS were carried out UTI lost its market dominance rapidly and by end of 2005,when the new share-holders actually paid the consideration money to Government its market share had come down to close to 10%! A new board was constituted and a new management inducted. Systematic study of its problems role and functions was carried out with the help of a reputed international consultant. Fresh talent was recruited from the private market, organizational structure was changed to focus on newly emerging investor and distributor groups and massive changes in investor services and funds management carried out. Once again UTI has emerged as a serious player in the industry. Some of the funds have won famous awards, including the Best Infra Fund globally from Lipper. UTI has been able to benchmark its employee compensation to the best in the market, has introduced Performance Related Payouts and ESOPs. The UTI Asset Management Company has its registered office at: UTI Tower, Gn Block, Bandra — Kurla Complex, Bandra (East), Mumbai - 400 051.It has over 70 schemes in domestic MF space and has the largest investor base of over 9 million in the whole industry. It is present in over 450 districts of the country and has 100 branches called UTI Financial Centres or UFCs. About 50% of the total IFAs in the industry work for UTI in distributing its products! India Posts, PSU Banks and all the large Private and Foreign Banks have started distributing UTI products. The total average Assets Under
Management (AUM) for the month of June 2008 was Rs. 530 billion and it ranked fourth. In terms of equity AUM it ranked second and in terms of Equity and Balanced Schemes AUM put together it ranked FIRST in the industry. This measure indicates its revenue- earning capacity and its financial strength. Besides running domestic MF Schemes UTI AMC is also a registered portfolio manager under the SEBI (Portfolio Managers) Regulations. It runs different portfolios for is HNI and Institutional clients. It is also running a Sharia Compliant portfolio for its Offshore clients. UTI tied up with Shinsei Bank of Japan to run a large size India-centric portfolio for Japanese investors. For its international operations UTI has set up its 100% subsidiary, UTI International Limited, registered in Guernsey, Channel Islands. It has branches in London, Dubai and Bahrain. It has set up a Joint Venture with Shinsei Bank in Singapore. The JV has got its license and has started its operations. In the area of alternate assets, UTI has a 100% subsidiary called UTI Ventures at Banglore This company runs two successful funds with large international investors being active participants. UTI has also launched a Private Equity Infrastructure Fund along with HSH Nord Bank of Germany and Shinsei Bank of Japan. Objects The basic objective of the UTI is to offer both small and large investors the means of acquiring shares inn the widening prosperity resulting from the steady, industrial growth of the country. There are two primary objectives of UTI, i.e., (i) to promote and pool the small savings from the lower and middle income people who cannot have direct access to the stock exchange, and (ii) to give them an opportunity to share the benefits and fruits of prosperity resulting from rapid industrialization in India. Functions The main functions of UTI are as follows: ? To encourage savings of lower and middle-class people. ? To sell units to investors in different parts of the country. ? To covert the small savings into industrial finance. ? To give them an opportunity to share the benefits and fruits of industrialization in the country. ? To provide liquidity to units. ? Review of Progress (Operations) The UTI has made good progress during the last 35 years. Bulk of the resources mobilized by the UTI have been deployed in the corporate sector. The UTI gives preference to the securities of new companies as to investments. The UTI invests its funds in government securities. Its operations as to sanction and disbursement of loans during the last few years are given in the table below: Sanction and Disbursement of Loans by UTI The total investments of JJTI on 30th June, 1998 stood at Rs. 59,600 crores. i.e., 1997-98, the UTI collected a record sum of Rs. 13.700 crores in its various schemes as against Rs. 9.800 crores in 1996-
97. The most popular schemes of UTI is UJP64 under which the UTI earned a record sum of Rs. 3,170 crores as against Rs. 2,600 crores in 1996-97. The rate of dividend under this scheme in 1997-98 was 20%. The income from dividends in the hands of investor is totally exempted from income-tax. Critical Evaluation The, UTI operations have been on increase as is evident from the above table. However, the UTI is not free from criticisms and charges which are given below: ? The UTI has been charged with the lack of transparency in its operations. ? The UTI has been operating within the walls of protection provided to it by the Unit Trust Act, 1963. As such, the UTI has not been subject to any regulation from various statutory bodies including the SEBI. ? The UTI has been manipulated by vested interests to effect the transactions on the stock exchanges. ? The UTI has been accused of corruption at various levels. ? Investors do not possess the right to attend the annual general meetings of the trust. ? The expense ratio of the UTI is quite high. ? Investors do not get benefits of the capital appreciation of the investments made by them. ? The pricing policy of the UTI is open for criticism. ? The operations of the UTI fall much short of the standards of efficiency. ? The investors are not getting adequate return on their investments. In spite of the above criticisms, the UTI has emerged as a leading financial institution of India. It has been successful in propagating the unit culture in the country and has offered alternative lucrative channels of investment to small savers. THE UNIT TRUST OF INDIA ACT, 1963 Title : THE UNIT TRUST OF INDIA ACT, 1963 Year : 1963 Act : POWERS AND FUNCTIONS OF THE TRUST 19.Business of Trust. Subject to the provisions of this Act and the regulations made under section 43, the Trust may carry on and transact any of the following kinds of business in India, namely
1) selling and purchasing units; (2) investing in, and acquiring, holding or disposing of, securities and exercising and enforcing, all powers and rights incidental thereto including protection or realisation of such investment and the taking over of the administration of any property offered as security for such investment; (3) granting of loans and advances upon the security of any movable or immovable property or otherwise;accepting, collecting, discounting, rediscounting, purchasing, selling or negotiating or otherwise dealing with, any bills of exchange, hundies, promissory notes, coupons, drafts, bills of lading, railway receipts, warehouse receipts, documents of title to goods, warrants, certificates, scrips and other mercantile instruments; (5) purchasing, selling or issuing participation certificates in relation to any loan or advance granted by any public financial institution or scheduled bank or such other institution as may be prescribed;(6) keeping money on deposit with companies or other bodies corporate, scheduled banks or such other institutions as may be prescribed; (7) investing in any special paper or security floated by the Central Government or the Reserve Bank or by any such foreign government or foreign bank as may be prescribed; (8) formulating in relation to any unit scheme,(a) savings and life insurance plan or plans under which a person may acquire an interest in units in association with or as the agent of, the Life Insurance Corporation or the Central Government, but not including the life insurance business; (b) savings and insurance plan or plans under which a person may acquire an interest in units in association with or as the agent of, the General Insurance Corporation but not including the general insurance business; or (c) any other plan or plans, under which a persons may acquire an interest in units; (9) acquiring immovable property or any interest therein, the development (including construction) and sale of such property and the rendering of financial and other assistance to any person for the acquisition of any immovable property or any interest therein and for the development (including construction) of such property; (10) providing leasing and hire purchase finance to persons, companies, and other bodies corporate; (11) providing merchant banking and investment advisory services; (12) extending investment or fund or portfolio management services to persons resident outside India; (13) opening of an account or the making of an agency arrangement with a bank incorporated outside India; (14) buying or selling of, or entering into such other dealings in, foreign exchange, as may be necessary for the discharge of its functions; (15) doing any other kind of business connected with mobilization of savings or investments which the Central Government may authorize; (16) generally, doing all such acts and things as may be incidental to or consequential upon the discharge of its functions under this Act.
doc_868463073.doc