Page 137 - DMGT512_FINANCIAL_INSTITUTIONS_AND_SERVICES

Financial Institutions and Services

Notes The total average Assets Under Management (AUM) for the month of June 2008 was 530 billion
and it ranked fourth. In terms of equity AUM it ranked second and in terms of Equity and
Balanced Schemes AUM put together it ranked FIRST in the industry. This measure indicates its
revenue- earning capacity and its financial strength.
Besides running domestic MF Schemes UTI AMC is also a registered portfolio manager under
the SEBI (Portfolio Managers) Regulations. It runs different portfolios for is HNI and Institutional
clients. It is also running a Sharia Compliant portfolio for its Offshore clients. UTI tied up with
Shinsei Bank of Japan to run a large size India-centric portfolio for Japanese investors.
For its international operations UTI has set up its 100% subsidiary, UTI International Limited,
registered in Guernsey, Channel Islands. It has branches in London, Dubai and Bahrain. It has set
up a Joint Venture with Shinsei Bank in Singapore. The JV has got its license and has started its
operations.
In the area of alternate assets, UTI has a 100% subsidiary called UTI Ventures at Banglore. This
company runs two successful funds with large international investors being active participants.
UTI has also launched a Private Equity Infrastructure Fund along with HSH Nord Bank of
Germany and Shinsei Bank of Japan.

9.2 Types of Mutual Funds

Most funds have a particular strategy they focus on when investing. For instance, some invest
only in Blue Chip companies that are more established and are relatively low risk. On the other
hand, some focus on high-risk start up companies that have the potential for double and triple
digit growth. Finding a mutual fund that fits your investment criteria and style is important.
Types of mutual funds are:

Value stocks: Stocks from firms with relative low Price to Earning (P/E) Ratio, usually pay good
dividends. The investor is looking for income rather than capital gains.
Growth stock: Stocks from firms with higher low Price to Earning (P/E) Ratio, usually pay
small dividends. The investor is looking for capital gains rather than income.
Based on company size, large, mid, and small cap: Stocks from firms with various asset levels.
Income stock: The investor is looking for income which usually come from dividends or interest.
These stocks are from firms which pay relative high dividends. This fund may include bonds
which pay high dividends. This fund is much like the value stock fund, but accepts a little more
risk and is not limited to stocks.
Index funds: The securities in this fund are the same as in an Index fund. The number and ratios
or securities are maintained by the fund manager to mimic the Index fund it is following.

Enhanced index: This is an index fund which has been modified by either adding value or
reducing volatility through selective stock-picking.
Stock market sector: The securities in this fund are chosen from a particular marked sector such
as Aerospace, retail, utilities, etc.
Defensive stock: The securities in this fund are chosen from a stock which usually is not impacted
by economic down turns.
International: Stocks from international firms.

Real estate: Stocks from firms involved in real estate such as builder, supplier, architects and
engineers, financial lenders, etc.

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