Understanding Unit Trust of India and Its Evolution Over Time

The Unit Trust of India (UTI) has a rich history that spans over seven decades. It was established in 1964 as a wholly-owned subsidiary of the Reserve Bank of India (RBI) to mobilize small savings and invest them in the capital market.

UTI's primary objective was to provide a safe and secure investment option for small investors by pooling their resources together and investing in a diversified portfolio of stocks and bonds.

The UTI was initially capitalized with a sum of Rs. 1,000 crores, which was a significant amount at that time, and was managed by a team of experienced professionals.

UTI's early success can be attributed to its innovative approach to investing, which included the concept of mutual funds, a relatively new investment product in India at that time.

Discover more: Unit Trust of India Uti

The Unit Trust of India (UTI) is an investment plan where funds are pooled together and then unitized. This means that the investor becomes a unitholder, holding a certain number of units.

The UTI provides a safe return on investment whenever funds are required. This is made possible by the daily price record and advertisement in newspapers, resulting in two prices being quoted on a daily basis: the purchase price and the sale price of the units.

The price of the units may fluctuate daily, but the fluctuations are nominal on a monthly basis. In July, the purchase price is usually the lowest of the year, making it an ideal time to invest.

The UTI has a trustee, governed by the Trust Companies Act of 1967, which monitors the manager's performance against the trust's deed. The trustee holds the assets of the trust in its name, "in trust" for the unitholders.

The UTI offers a range of investment options, including equity shares, debentures/bonds, government securities, and other investments. Here's a breakdown of the UTI's investment portfolio over the years:

The UTI also offers tax rebates to unit holders, making it an attractive investment option.

UTI Mutual Fund has been a pioneer in launching various schemes, such as the UTI Unit Linked Insurance Plan (ULIP) with life and accident cover, which was launched in 1971. It also launched India's first Offshore Fund – India Fund in 1986.

UTI Mutual Fund currently manages the portfolios of domestic and offshore funds and offers discretionary, non-discretionary and advisory services to HNI clients, corporates, and institutions. As of 2024, UTI AMC has an Assets Under Management (AUM) of Rs.15.56 lakh crores.

The company has a nationwide reach through its distribution channels, operating more than 190 branches across the country.

UTI Mutual Fund is one of the oldest mutual fund companies in India, with a rich history dating back to its early days.

The company launched its first scheme, the UTI Unit Linked Insurance Plan (ULIP) with life and accident cover, as far back as 1971. This pioneering move marked the beginning of UTI's journey in the mutual fund industry.

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UTI Master Share, India's first Offshore Fund – India Fund, and the UTI Wealth Builder Fund, the first of its kind combining different asset classes like equity and gold, were launched in 1986. These innovative schemes showcased UTI's ability to adapt and innovate.

As of 2024, UTI AMC has an impressive Assets Under Management (AUM) of Rs.15.56 lakh crores. This significant milestone is a testament to the company's growth and success over the years.

UTI Mutual Fund currently operates more than 190 branches across the country, providing a nationwide reach through its distribution channels. This extensive network allows the company to cater to a vast investor base.

With an investor base of more than 12 million live folios, UTI Mutual Fund has established itself as a trusted and reliable player in the industry. This significant number of investors is a reflection of the company's reputation and commitment to its clients.

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The Unit Trust of India Act was introduced in 1963 to encourage saving and investment, and the Unit Trust of India (UTI) was established the same year.

UTI was initially focused on holding, managing, and disposing of securities to generate income, profits, and gains for its participants.

The UTI had a diverse portfolio, with investments in equity shares, debentures/bonds, government securities, and other assets.

Here's a breakdown of UTI's investments in 1992/93:

UTI had a total of 49 schemes in 1992/93, and by 1997/98, this number had increased to 79.

The Unit Scheme-64, a part of UTI, was a significant investment vehicle, with a share of investible funds in the total investible funds of UTI ranging from 33.5% in 1992/93 to 32.1% in 1997/98.

Other mutual funds also invested in similar assets, with a focus on equity shares, debentures/bonds, and government securities.

Here's a comparison of the investments of other mutual funds in 1991/92 and 1992/93:

The Unit Scheme-64 was recommended to be tax-free for the next three years, providing a tax rebate to unit holders.

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The Unit Trust of India (UTI) was established in 1963 to encourage saving and investment, and to provide a platform for people to participate in the income and profits generated by the trust's holdings.

UTI's investment portfolio is diversified, with a significant portion invested in equity shares, which made up 47.8% of the portfolio in 1995-96.

The trust's investment in government securities has varied over the years, but in 1996-97, it made up only 7.9% of the portfolio.

UTI has a wide range of schemes, including the Unit Scheme-64, which was introduced to provide a tax-free investment option for unit holders.

Here are some of the key features of UTI's investment schemes:

The trust's investment process is designed to provide stability and transparency to investors, with a fixed composition of securities that remains unchanged throughout the trust's lifespan.

UITs are often compared to mutual funds, but they have some key differences.

UITs are open-ended schemes, meaning they can accept and redeem investments at any time, whereas mutual funds have a fixed investment period.

One major advantage of UITs is that they offer a wide range of investment options, including stocks, bonds, and commodities.

UITs are typically less expensive than mutual funds, with lower management fees and expenses.

UITs allow investors to diversify their portfolios by investing in a variety of assets, including stocks, bonds, and commodities.

UITs are often more liquid than mutual funds, making it easier for investors to access their money when needed.

UITs can be tailored to meet specific investment goals and risk tolerance, making them a popular choice for investors.

UTI Mutual Fund is one of the oldest mutual fund companies in India, launched in 1971. It has been a pioneer in launching various schemes over the years.

UTI Mutual Fund offers a wide range of services, including discretionary, non-discretionary, and advisory services to high net worth individuals, corporates, and institutions. It also provides retirement solutions and private equity funds in India and over 35 countries.

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UTI Mutual Fund has a large investor base, with more than 12 million live folios. It operates over 190 branches across the country, providing a nationwide reach through its distribution channels.

As of 2024, UTI AMC has an impressive Assets Under Management (AUM) of Rs.15.56 lakh crores.

The company manages both domestic and offshore funds, catering to the diverse needs of its investors. Its portfolio includes a mix of asset classes, such as equity and gold, which are lowly correlated.

Here's a quick look at some of the key features of UTI Mutual Fund:

UTI Mutual Fund has launched various schemes over the years, including the UTI Unit Linked Insurance Plan (ULIP) with life and accident cover, and the UTI Wealth Builder Fund, which combines different asset classes like equity and gold.

There are several types of UITs, each with its own characteristics and investment focus. Equity UITs invest primarily in stocks and equity-related instruments, suitable for investors seeking long-term growth potential.

Debt UITs focus on fixed-income securities such as government, corporate, and debentures, ideal for investors looking for stable income and capital preservation.

Balanced UITs aim to balance equity and debt investments, suitable for investors seeking capital growth and income generation. They often have a mix of 40% to 60% equity and 40% to 60% debt.

Sector-specific UITs specialize in specific sectors or industries, allowing investors to target their investments accordingly. This type of UIT is ideal for investors who have a strong interest in a particular sector.

Index UITs track a specific market index, such as the Nifty 50 or BSE Sensex, offering investors broad market exposure and a cost-effective way to diversify their portfolios.

Here's a breakdown of the types of UITs and their characteristics:

The Unit Trust of India Schemes were introduced in 1964 with the unit scheme, and over the years, several other schemes were added to the portfolio. In 1917, the Unit Linked Insurance Plan was introduced.

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The Unit Trust of India Schemes cater to different needs and goals, including saving for retirement and providing a steady income. The Senior Citizens Unit Plan was introduced in 1993 for the benefit of senior citizens.

Some of the notable Unit Trust of India Schemes include the Monthly Income Unit Scheme and the Master Equity Plan, which was brought in 1995. The Money Market Mutual Fund Scheme was introduced in 1997, providing a low-risk investment option.

Here's a brief overview of some of the key schemes:

The Unit Trust of India Schemes have undergone changes over the years, with some schemes being discontinued or replaced with new ones. The Children Gift Growth Fund Unit Scheme was brought in 1986, and the Rajlakshmi Unit Scheme was introduced in 1992.

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The Specified Undertaking of UTI, or SUTTI, is a significant entity in the financial world. It was formed after the restructuring of the Unit Scheme-1964.

SUTTI inherited a large portfolio of assets, including real estate and 25 assured-return schemes. This gave it a substantial presence in the market.

As of 2016, SUTTI had stakes in 43 listed and 8 unlisted companies, valued at over Rs. 60,000 Crores.

There are several types of Unit Investment Trusts (UITs) to choose from, each with its own unique characteristics and investment focus. Equity UITs invest primarily in stocks and equity-related instruments, making them suitable for investors seeking long-term growth potential.

UITs can be categorized into different types based on their investment focus. For example, Debt UITs focus on fixed-income securities such as government, corporate, and debentures, providing investors with stable income and capital preservation.

Balanced UITs aim to strike a balance between equity and debt investments, offering investors a combination of capital growth and income generation. This type of UIT is suitable for investors who want to spread their risk and achieve a stable return.

Sector-specific UITs specialize in specific sectors or industries, allowing investors to target their investments accordingly. This type of UIT is ideal for investors who have a specific interest in a particular industry or sector.

Index UITs track a specific market index, such as the Nifty 50 or BSE Sensex, offering investors broad market exposure and a cost-effective way to diversify their portfolios.

Here are the different types of UITs, summarized: