UTI
Intl set to launch overseas infra fund
Mumbai May 08, 2006 UTI
Mutual Fund's UK-based arm, UTI International, proposes to set up an overseas
infrastructure fund with a corpus of around $200 million. U
K Sinha, chairman of UTI MF said the funds mobilised overseas for the infrastructure
fund will be invested in various infrastructure projects in India. In the last
six months, the assets under management with UTI International increased to $150
million from $90 million in the last six months. The
process of registering the infrastructure fund with the Securities and Exchange
Board of India (Sebi) is in process. UTI
Mutual Fund is also planning to leverage its association with Boston-based finance
firm, State Street Global Advisors (SSGA), to carry forward its plan to invest
a part of its assets under management in overseas bonds and exchange traded funds.
The mutual fund is also planning to register
its schemes with the Monetary Authority of Singapore following the signing of
the comprehensive economic co-operation agreement (CECA) between India and Singapore.
UTI Mutual Fund will be one of the few firms
who will be entering Singapore's capital markets under the treaty. Till now, the
treaty has mainly seen banks from both countries trying to explore each other's
markets. SSGA also has a license to operate in Singapore. UTI
Mutual Fund is one of the few funds who have firmed up their plans to tap the
overseas market. The government decided to raise the ceiling on aggregate investments
by mutual funds in overseas instruments from $1 billion to $2 billion. It also
removed the requirement that mutual funds could only invest in foreign companies
which have 10 per cent reciprocal shareholding in Indian companies.
The government has also allowed a limited
number of qualified Indian mutual funds to invest, cumulatively up to $1 billion,
in overseas exchange traded funds. The
mutual fund is awaiting final guidelines from Sebi before making the move. At
present, Sebi has fixed the maximum limit for mutual fund investment in overseas
capital market at 10 per cent of the net assets of each mutual funds subject to
a ceiling of $50 million. In
2004, UTI MF had launched an index fund based on international benchmark - Dow
Jones Global Titans 50 in collaboration with SSGA. The index is computed and maintained
by Dow Jones and Co. The product
is offered chiefly for domestic investors wanting to have a feel of the international
equity market through a passively-managed scheme. A minimum Rs 10,000 will be
required for investing in the scheme. SSGA, which has over $1.2 trillion of assets
under management, is currently ranked as the world's largest institutional asset
manager.
Its client base includes
pension funds, insurance companies, government organisations and corporate. More
than half of the assets are managed through indexed or enhanced equity strategies Top | 
