UTI AMC plans to launch global emerging markets fund

UTI Asset Management Company, or UTI AMC, is planning to seek fresh approval from the Securities and Exchange Board of India (Sebi) to launch a global emerging markets fund aimed at high net worth individuals (HNIs).

The company will launch the fund in collaboration with the T Rowe Price (TRP) Group, which acquired a 26 per cent stake in UTI AMC and UTI Trustee Company in 2010. The fund would operate in a feeder fund structure, wherein the scheme would invest in T Rowe Price Emerging Market fund, UTI group president and chief marketing officer Jaideep Bhattacharya said on the sidelines of a tie-up with Srei Sahaj for distribution of its micro-pension products.

Earlier, it had got Sebi’s approval to launch the emerging markets fund, but was forced to shelve the plans due to unfavourable market conditions.

The tie-up with Srei Sahaj will allow UTI AMC to distribute its micro-pension products across Assam, Bihar, Orissa, Tamil Nadu, Uttar Pradesh and West Bengal. Srei Sahaj would provide the infrastructure for the distribution.

“Many HNI investors want to invest across geographies. There has been a good demand for such a product. We will now seek fresh approval from Sebi to launch this fund, because the earlier one lapsed,” said Bhattacharya.

“We have 23,000 common service centres across six states that are manned by village-level entrepreneurs. Each service centre caters to a set of six villages and a population of 10,000,” said Meena Chaturvedi, chief executive officer (public services and e-learning), Srei Sahaj.

Under the initiative, investors would have to contribute a minimum monthly amount of Rs 200 towards the UTI-Retirement Benefit Pension Fund to enable them to receive pension in the form of periodical income after they attain the age of 58.

The fund invested 60 per cent in debt and 40 per cent in equity, and gave an average return of about 11.7 per cent, Bhattacharya said.