Close on the heels of UTI Leadership Equity Fund, UTI Mutual Fund has launched another equity fund. Named as UTI Contra Fund, it will invest in equities on the basis of insights from behavioral finance. The fund will be initially available for subscription from February 22 to March 22, 2006.
Benchmarked against S&P CNX Nifty index, the fund will seek to benefit out of the irrational behavior pattern of the investors. It will focus upon stocks that are currently undervalued because of emotional and behavioral patterns present in the stock markets.
As per the stated asset allocation, the fund will invest 80-100 per cent of its assets in equities, while it can also invest up to 20 per cent of its assets in debt and money market instruments.
During the new fund offer period, the fund will charge an entry load of 2.25 per cent for investments of less than Rs 2 crore. For investments of an amount greater than or equal to Rs 2 crore, no entry load will be charged but an exit load of 0.5 per cent will be levied upon redemption within 6 months from the date of allotment.