US-64 comes out of woods

US-64 comes out of woods
ENS ECONOMIC BUREAU

MUMBAI, APR 27: Unit Trust of India's (UTI) flagship US-64 scheme, which faced huge redemptions and negative reserves last year, has come out of the woods. Net sales of US-64 scheme have turned positive with total sales exceeding redemptions from February 2000 onwards. The scheme earned a net income Rs 738 crore and was the star performer during the quarter ended March 31, 2000, UTI chairman P S Subramanyam said.

The scheme's total net income for the nine month period up to March 2000 stood at Rs 1927 crore, representing a 62 per cent growth over December 1999 levels. US-64 reserves as on March 2000 stood at Rs 4,223 crore, over 31 times the reserves on June 1999. Overall, it constituted 46 per cent of UTI's reserves during the period.

Sales of the scheme accounted for 23 per cent of fresh sales during the quarter. Individual investors accounting for 63 per cent of the sales. During July 1999 - March 2000, fresh sales under US-64 amounted to Rs 2237 and in March alone to Rs 706 crore. In April, the scheme has so far recorded sales of around Rs 266 crore. Redemptions from July 1999 to date stood at Rs 1,963 crore.

As to whether the scheme had been affected by the recent meltdown in the ICE (information, communication, entertainment) stocks, Subramanyam said UTI had been successful in encashing the market boom before volatility set in. "New economy stocks will continue to do well. We plan to shuffle our exposure (to these stocks) but retain it at the current 25 to 30 per cent levels," he added.

UTI's net income for the nine months ended March 2000 was Rs 8991 crore, a growth of 49 per cent over six months up to December 1999. Sales of all schemes crossed Rs 10,000 crore as on March 31, 2000. Net sales stood at Rs 2491 crore as compared to negative sales of Rs 3,349 crore in the corresponding period of the previous year. Reserves and surplus rose to Rs 9202 crore from the Rs 1492 crore on June 1999.

Investible funds of all domestic schemes of UTI (excluding VECAUS) as on March 2000, rose to Rs 72487 from Rs 60452 crore on June 1999. US-64 was again major contributor to the increase, the institution said.

The net income of equity schemes rose to Rs 2341 crore from Rs 136 crore on June 1999. Reserves rose to Rs 2341 crore. Income distribution to the tune of Rs 581 crore has been announced under some schemes. The board also declared dividend under Mastershare (16 per cent) and Grandmaster (10 per cent). The net income of income schemes rose to Rs 4917 crore from Rs 3568 crore on June 1999. Reserves rose to Rs 4474 crore.

The UTI board also approved the launch of sector specific funds in media, internet, automobile and others. "They will be introduced at the appropriate time," Subramanyam said. Its overseas scheme, India Media Internet Communication fund, has collected $ 60 million, of which $ 30 million is in hand and is in the process of being deployed, he added.