Unit Trust of India (UTI)

UTI Mutual Fund was carved out of the erstwhile Unit Trust of India (UTI) as a Securities and Exchange Board of India (SEBI) registered mutual fund from 1 February 2003. The Unit Trust of India Act 1963 was repealed, paving way for the bifurcation of UTI into: Specified Undertaking of Unit Trust of India (SUUTI) and UTI Mutual Fund (UTIMF).

UTI Mutual Fund has been the pioneer for launching various schemes viz. UTI Unit Linked Insurance Plan (ULIP) with life and accident cover (Launched in 1971), UTI Mastershare (Launched in 1986), India’s first Offshore Fund, India fund (Launched in 1986), UTI Wealth Builder Fund, the first of its kind in the Indian mutual fund industry combining different asset classes i.e. equity and gold which are lowly correlated.

Functions of UTI:

• To grant loans and advances.
• To accept discount, purchase or sell bills of exchange, promissory note, bill of lading, warehouse receipt, documents of title to goods etc.,
• To provide merchant banking and investment advisory service.
• To extend portfolio management service to persons residing outside India.
• To provide leasing and hire purchase business.
• To buy or sell or deal in foreign exchange dealings.
• To invest in any security floated by the Central Government, RBI or foreign bank.
• To formulate unit scheme or insurance plan in association with or as agent of GIC.

Objectives:

(i) To enable them to share the benefits and prosperity of the industrial development in the country.

(ii) To encourage and pool the savings of the middle and low-income groups.

Advantages of Unit Trust:

• There is a high degree of liquidity of investment as the units can be sold back to the trust at any time at prices fixed by trust.
• The Unit-holders will be getting regular and good income, as 90 percent of its income will be distributed.
• The investment is safe and the risk is spread over a wide range of securities.
• Dividends up to Rs. 1,000 received by the individual are exempt from income-tax.