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UTI blacks out US-64 net assets & reserves in ad

S. Vaidya Nathan

BL Research Bureau

THE Unit Trust of India (UTI) has not published key financial details regarding its flagship fund, Unit Scheme-1964 (US-64). In the summary half-yearly accounts published in an advertisement form, UTI has provided only the unit capital for US-64.

Vital details such as net assets, their composition, reserves, liabilities (which could reveal the extent of credit lines availed) and erosion/accretion in value of investments have not been disclosed as of June 30, 2001.

The fund has disclosed details of net assets and reserves for other UTI schemes as of June 30 2001. The disclosure of either the reserves or the net assets of US-64 would have enabled an approximate computation of the Net Asset Value. This is now rendere d virtually impossible.

Notably even at the time of the last officially admitted crisis in July 1998, the fund had disclosed key financial numbers such as reserves and net assets of US-64. Then the reserves were negative at Rs 3,498 crore as of June 30, 1998. But all these num bers were detailed out in the advertisement published usually by UTI in 1998.

For US-64, in 2000-01, UTI has just disclosed the unit capital at the end of the June 30, 2001 as Rs 12,786.36 crore and at the beginning of the half year - that is as of December 31, 2000 at Rs 15,993.24 crore. This represents a decline of Rs 3,206.88 c rore (20 per cent). In April-May alone UTI had suffered outflows of Rs 4,151 crore in US-64.

MIPs reserves in red: Out of the 20 Monthly Income Plans that are in existence now, 16 have reserves in the negative terrain while two are of recent vintage. Only two MIPs - the third and fourth versions of 1996 - have positive reserves.

All assured return schemes targeted at institutional investors also have also negative reserves. The Children Gift and Growth Fund '86 has negative reserves of Rs 1,653.83 crore on a corpus of Rs 3,993.75 crore. Only ULIP '1971, UTI Money Market Fund, UT I Bond Fund, Mastershare and Mastershare Plus have a healthy reserves position.