Unit Trust of India's (UTI) latest fund mobilisation figures reveal that it has garnered more than Rs 11 bn under its monthly income plan (MIP). This was reported by a leading financial newspaper.

UTI, with assets in excess of Rs 601 bn as on 31st August 1999, is India's largest mutual fund (MF). It accounts for 76% of India's MF segment.

UTI's MIP '99 was the first assured income plan launched by UTI, which assured returns for the first year of the scheme. It is also the first scheme that ensured that redemptions would not be below par.

Even the last MIP launched by UTI witnessed record inflows of Rs 28 bn in May. Participation at the retail level was very high. UTI's excellent mobilisation figures assume greater significance in light of the fact that the MIPs offer lower returns (than other schemes) and assured returns only for a year. UTI's popularity seems to be intact, and some of its products continue to enjoy investors' trust and approval.

Assured return schemes are becoming more popular among investors following the sudden drop in share prices across the bourses. In view of UTI's roaring success, other mutual funds are likely to duplicate its move by launching MIPs or other variants. Volatility in stock prices will also see increasing inflows in income schemes at the expense of growth schemes. Software-dedicated funds in particular, will witness sharp outflows after the dip in prices of software scrips.

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