Jul 2, 2001|
UTI mess: Time to pay up
It was only three years back when the first and largest mutual fund in India was fighting off substantial erosion in the net asset value of its flagship scheme US 64. Well, the behemoth finds itself in a similar position today. Or so it seems by the announcement that the sale and repurchase of units of US-64 scheme have been suspended for six months.
Letís come straight to the purpose of writing this article i.e. protecting the interest of the retail investor. How can a mutual fund, which incidentally is the only one that does not report to the Sebi, suspend redemptions without giving a notice? Is this a privilege for having a governmental parentage? If it is, then it is time to set it right. And to do this, we do not need another committee (havenít we have enough of them already?). We need action to be taken against those in charge. Those who are responsible for creating this mess!
To many, this development has been a logical conclusion to the dubious manner in which the fund operates. Indeed, over the last few months several publications have carried articles showing the UTIís flawed investment strategy. While the entire investment community was shunning the HFCLs and the Globals of this world, UTI was lapping up such stocks. Not surprising other funds have turned in a much better performance over the last three months as compared to the UTI.
Will this latest development trigger much needed reform? It may. But do not bet on it. The government and the bureaucrats have an interest in keeping this over Rs 600 bn giant alive and kicking. On the other hand, the broader market wishes that the big bad boy of the mutual fund industry mend its ways. This development will not only hit the UTI. It will impact the entire mutual fund industry and the stock markets. We all will have to, once again, pay for the sub-par performance of an institution that has refused to become answerable to the regulators.
The time has come to demand a change. We want change.
More Views on News
Jun 10, 2017
Forty Indian investing gurus, as worthy of imitation as the legendary Peter Lynch, can help you get rich in the stock market.
Aug 16, 2017
All across the country, the old gods become devils. New, gluten-free gods take their places...
Aug 16, 2017
And what it has in common with beating the stock market too.
Aug 16, 2017
Ensure your financial Independence, and pledge to start the journey towards financial freedom today!
Aug 14, 2017
Last week's correction is making a number of Super Investor stocks look a lot more attractive...
More Views on News
Aug 7, 2017
The data tells us quite a different story from the one the government is trying to project.
Aug 4, 2017
The small-cap space is full of small players that are clear proxies to great growth stories and Indian megatrends.
Aug 8, 2017
Bharat-22 is one of the most diverse ETFs offered so far by the Government. Know here if you should invest...
Aug 12, 2017
The India VIX is up 36% in the last week. Fear has gone up but is still low by historical standards.
Aug 7, 2017
Raksha Bandhan signifies the brother-sister bond. Here are 7 thoughtful financial gifts for sisters...
Copyright © Equitymaster Agora Research Private Limited. All rights reserved.
Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement. LEGAL DISCLAIMER:
Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here
. The performance data quoted represents past performance and does not guarantee future results.SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.
Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: firstname.lastname@example.org. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407