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S. Vaidya Nathan

GIC Mutual Fund has launched a liquid fund that is open for subscription in the initial offer period between January 8 and January 11. This is the first scheme from GIC Mutual Fund after about two-and-a-half years. The scheme is targeted at the corporate sector and high net worth individuals and will invest in short-term debt instruments. There are growth and income options. The minimum limit is Rs 25,000 and additional investments will be in multiples of Rs 10,000 each. For the dividend re-investment plan, the maximum amount is Rs 5 lakh. The fund also plans to launch bond and gilt funds.

US-64 update: The first officially declared NAV of US-64 is Rs 5.81 per unit. Between August 1 and December 31, the NAV was Rs 4.74 per unit when the BSE Sensitive Index hit a low of 2600.12 points and Rs 6.59 per unit when the Sensex hit a high of 3442.89 points.

The unit capital as of June 30, 2001 was Rs 12,786.36 crore and as of December 31, 2001, Rs 12,778.45 crore. The change in the capital base is due to re-investment of dividends of Rs 407 crore and redemption of units aggregating Rs 414.91 crore under the Special Liquidity Package.

Sale of units, which was suspended in July 2001 have resumed from January 1 without any load. There will be an entry load of 1 per cent from February onwards.

UTI plans to delist the units of the scheme from the stock exchanges where it is listed. The repurchase unit limit under the Special Liquidity Package has been raised from 3,000 units to 5,000 units.

For holdings in excess of 5,000 units, a separate package has been announced. Repurchase would be at Rs 10 per unit or the NAV which-ever is higher provided they are tendered on May 31, 2003. If tendered between now and May 2001, the repurchase would be at NAV-linked prices.

For January 2002, sale of units would be at NAV. Repurchase will be at NAV for holdings in excess of three years, at 99 per cent of NAV for holdings between two and three years, 98.5 per cent of NAV for holdings between one and two years and 98 per cent of NAV for holdings of less than a year. This repurchase load structure is applicable to units as of June 30.

Units issued from January 1 will be eligible for repurchase only at NAV based repurchase price. UTI has indicated that unit certificates, membership advices and RI statements issued prior to June 30, 2001 will be repurchased at prices notified under the Special Liquidity Package or NAV-based price, whichever is higher. These will have to be accompanied by the Repurchase Application Form.

Re-investment of dividend: The UTI has announced the re-investment of income distribution as on June 30, 2001 has been made at a notional price of Rs 10 in the month of July 2001. The UTI had indicated that if the NAV-based sale price was less than Rs 10 on January 1, additional units would be allotted and added to the account of the unitholders. The UTI has now indicated that such increase to holdings would be done and included in the Statement for July /August 2002.

US-64 prices: The repurchase price for unitholdings of up to 5,000 units (the limit has been raised from 3,000 units to 5,000 units) would be Rs 10.50 per unit under the Special Liquidity Package for January 2002. This is a rise of 10 paise over the December levels. For holdings of over 5,000 units, repurchase would be at NAV-based prices.

UTI maturity prices: The UTI has announced that the redemption price for UGS 5000 would be Rs 10.02 per unit. For MIP (IV) 1996, the maturity price would be Rs 8.37 per unit for the Monthly Option and Rs 15.95 per unit under Cumulative Option. If unitholders have opted for redemption and conveyed the option to UTI by December 31, the maturity proceeds would be despatched by January 1.The registrars are UTI Investor Services for MIP (IV) 1996 and Tata Consultancy Services for UGS 5000.

The package was offered from August 2001 at a price of Rs 10 per unit and is due to end in May 2003 at Rs 12 per unit. For holdings in excess of 3,000 units, a repurchase facility linked to the NAV will be available from January 1.

Asset Allocation Fund: Pioneer ITI Mutual Fund plans to launch an asset allocation scheme. The offer document has to be cleared by SEBI. The Pioneer ITI Asset Allocation Fund will be an open-end scheme that will offer five options — Pure Growth (90 per cent in equities and 10 per cent in debt), Steady Growth (70:30), Balanced Growth (50:50), Conservative Growth (30:70) and Inflation Hedge (10:90). The fund also plans to launch a passively managed open-end scheme with an automatic buy-sell mechanism. In this scheme, the extent of investment in equities will be determined by the weighted average price earnings ratio of S&P CNX Nifty stocks. Higher the PE ratio, lower the equity exposure and vice versa would be the thrust of this scheme.

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