Unit Trust Launches Nifty Index Fund

There is no immediate threat to the software bubble, but long term investors will continue to be bullish about the fast moving commercial goods (FMCG) sector, B G Daga, executive director, business development and marketing, Unit Trust of India, said while addressing mediapersons on the launch of the Nifty Index Fund.

"The FMCG sector, especially pharma, promises long-term high growth and hence will sustain investor interest. While the performance of specific scrips in the software sector may not be to expectations, the sector as a whole will grow significantly over the next three years," Daga said. Investor preference for these two sectors is also reflected by a recent study conducted by the UTI reviewing the profile of two major indices - S&P CNX Nifty and Sensex. While the software sector dominates Nifty followed by the FMCG sector, the order is reversed in the case of the Sensex. It is followed by refineries and petroleum, banking and finance, pharma and telecom.

The first five sectors, Daga said account for 75 per cent of the index while the top 10 companies represent two-third of the market cap.

On the Nifty Index Fund, Daga said it fills the need for a a fund which is more liquid and broadbased. UTI's Masterindex Fund, launched in July 1998 and based on the Sensex, is narrow in comparison.