On the eve of anxiously awaited re-open-ending of the oldest mutual fund – Unit Scheme '64 from January 1, 2002, UTI has redefined the course of the fund in times to come. US '64 becomes a debt tilted balanced fund which will have a maximum 75 per cent allocation to debt from the present 39 per cent. And the minimum equity allocation will be 25% with a maximum cap of 55%
Interestingly, the sale and repurchase will be based on NAV but with a spread. The sale price will not exceed 103% of NAV. And the repurchase within 1 year from the date of investment will be made at atleast 97% of the NAV. The repurchases within 1year to 2-years from the date of investment will be made at atleast 98 percent of the NAV. The repurchases from 2-years to 3-years from the date of investment will be made at atleast 99% of the NAV.and at NAV after 3 years.
THE AMENDMENTS TO UNIT SCHEME 1964 (W.E.F. 01.01.2002)
1. Scheme objective: The scheme aims at providing income distribution, cumulation of income and capital appreciation over a long term.
2. Investment Pattern Debt: Not more than 75% of assets under management will be invested in debt instruments. For investments in corporate debt the minimum rating would be of `AA' grade. Of this, at least 7.5% investment would be in Government of India securities.
Equity: - Minimum 25% - Maximum - 55%.
Currently, 61% of the asset under management of the scheme is in equities while the balance 39% is in debt including Government Securities and money market instruments. This will be brought down in line with the stated investment pattern before 30.06.2003.
3. The scheme will offer Income and Growth options.
a. Under the Income option there will be a provision for payment of income distribution or reinvestment of income distribution at NAV/NAV based price.
b. Under the Growth option no income distribution will be paid but income will be ploughed back and reflected in the NAV. This option will have a separate NAV, after the next payment of income distribution/reinvestment. c. Changeover from Income to Growth option and vice versa will be permitted at respective NAVs. Existing investors will be considered as under the Income Option unless they specifically opt for Growth Option by a simple request in writing. Fresh investors who do not indicate the option in the application form will be treated as under the Income Option.
4. Minimum initial investment: Rs.5000/-. Subsequent minimum investment is Rs.1000/- per folio. No upper limit.
5. Date of acceptance: The date of acceptance of an application for sale or repurchase of units will be the day on which the branch office of UTI/UTI Financial Centres/authorised collection centres of UTI with Cash Management Service (CMS) after being satisfied that such application is complete in all respects, accepts the same. The acceptance date in respect of applications received at the authorised collection centres of UTI where CMS facility is currently not available or any other authorised centre as prescribed by UTI from time to time, will be T + actual number of days but in any case will not be beyond the 5th working day (T+5) from the date of receipt (T) of such applications at these offices/ centres.
6. Sale/Repurchase price Sale will be at a price not exceeding 103% of NAV. Repurchase will be as follows:
Within 1 year from the date of investment Not below 97% of the NAV.
From 1 year to 2 years from the date of investment. Not below 98% of the NAV.
From 2 years to 3 years from the date of investment. Not below 99% of the NAV. After 3 years. At NAV.
7. Partial repurchase under a folio has to be for a minimum of Rs.1000/- provided the outstanding balance in the folio after such repurchase is not less than Rs.5000/-.
8. Net Asset Value (NAV) will be calculated and declared daily.
9. Expenses: The scheme will follow the SEBI prescribed limit for expenses. Contribution of 0.25% will be made to DRF and 0.10% to Staff Welfare Fund.
10. Listing: Steps are being taken to de-list the scheme from all stock exchanges.
11. Derivatives, Overseas Investment and Stock lending - A provision has been made for hedging through derivatives trading, overseas investment and stock lending.
12. Book closure - Book closure will be for a period not exceeding 15 days in a year.
13. The provisions applicable for Unit Scheme 1964 will also be the governing provisions for the existing investments made in the Re-investment Plan 1966 and Children's Gift Plan 1970 unless otherwise specified.