In your interest.
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No beating about the bush.
Meanwhile, UTIMF’s Asset Management Company (AMC) is planning a public issue to raise Rs2,000 crore and get listed on the stock exchanges. Its pre-IPO advertising campaign claims that it was UTI which taught ordinary Indians the language of the stock market. It is another matter that most investors credit Dhirubhai Ambani with introducing them to the share bazaar while the erstwhile Unit Trust of India was seen more as a government-guaranteed fixed-income scheme offering tax benefits and steady returns.
In any case, investors attracted by the IPO campaign need to understand that UTIMF is a different entity – with no government guarantees and only half its former size. Further, an AMC earns only a percentage of the corpus it raises under different mutual fund schemes. Its income is unrelated to the performance of its schemes. This means that even in a bull market, its income can decline if it fails to attract investors. That is why AMCs, in general, attract a price of just under 5% of their assets under management (AUM) or total corpus when they are sold.
Let’s get back to SCUP, which was marketed under the slogan: “Makes your old age worry free, once and for all” but was summarily terminated. Nita Kulkarni of Jalgaon is among those who ask, ‘what do I do now’? So let me answer some of the questions raised by readers and offer possible solutions. First, SCUP was terminated at the close of business on 18th February at the prevailing NAV of Rs23.22 per unit “after deduction of premium amounts”. A public notice appeared in Business Standard and letters were sent to individual unit-holders. Clearly, many investors have not received the letter and are unaware that their money is simply lying in UTIMF’s coffers without earning interest. They need to hurry and claim redemption by submitting their unit certificates. UTIMF does not say how many investors have not claimed redemption proceeds so far. However, its investor department is working proactively to help investors to complete redemption formalities, switch to other schemes or understand options.
Remember, UTIMF is categorical that unit-holders are not entitled to any interest, costs or compensation after February. So, the first thing to do is move swiftly to collect your money by submitting the duly signed original membership certificate. If you plan to reinvest the money in another UTIMF scheme, please fill the option form that is available.
Subodh Mittal, who is 65, wants to know if he will still benefit from SCUP. Well, everybody above 58 will continue to get hospitalisation insurance cover because of an agreement with an insurance company. Some unit-holders have chosen a ‘Floater Medical Policy’, available for a brief period at a specially negotiated rate.
S Prakash is one of those investors who have heard nothing about the termination of SCUP. Others like him must write to UTIMF immediately and those who have not received their money after submitting their certificate can write to me with their certificate and folio number and I will forward it to the UTIMF investor cell. Better still, they can write directly to UTIMF or contact its toll-free helpline at 1800 22 1230, or SMS it at 5676756 or email it to [email protected] Dainik Hindustan reader Rajiv Gupta of Agra, for instance, asks whether UTIMF’s action amounts to a breach of contract. Well, some investors in Pune, led by investment advisor Stephen D’souza, think so and plan to file a case. Those interested can contact him at [email protected] and join the litigation.
Ms Dalal is the Consulting Editor of MoneyLIFE. Subscribers get free help in resolving their problems with select providers of financial services. She can be reached at suchetadalal @yahoo.com