IISFUS to offer 13.5%UTI has pegged the interest rate for this year's first Institutional Investors Special Fund Unit Scheme (IISFUS) at 13.50 per cent per annum for the entire tenure. While the fund has set a target of Rs 1,000 crore for the scheme, it hopes to mobilise at least Rs 800 crore owing to ICICI's bond issue which has pegged its coupon at 14 per cent. Besides the 1993 institutional fund which mobilised Rs 1277 crore on a 16 per cent per annum promise, none of the IIFUS has ever mobilsed Rs 800 crore. UTI had mobilsed a combined Rs 996 crore in its two IISFUS launched in 1997. While IIFUS '97 had promsed a 15 per cent return for its entire tenure, IIFUS '97 (II) had mobilsed Rs 321 crore on a promise of 12.75 %.
Payout from UTI
UTI has also declared income distribution rates for its various income schemes for the year ending March 31, 1999. The income distribution rates have been slashed in most cases. The monthly income payout in MIP 94 (III) has been slashed from 13 per centper annum in 1997-98 to 12.5 per cent. In MIP 95 (I), MIP 95 (II) and MIP 95 (III), returns have been slashed to 12.5 per cent from 14 per cent in MIP '95 (I) & (II) and 13.5 per cent in MIP '95 (III). The four MIPs launched in 1996 will pay a 13 per cent per cent monthly income in 1998-99 compared to 15 per cent paid last year in MIP 96 (II), (III) and (IV) and 14.5 per cent in MIP 96(I) in 1997-98.
Funds on conversion spree Following poor response to equity funds, AMCs are desperate to hold on to their investors and are converting their closed-end funds into open-end funds. UTI was the first to convert its Mastergain '92 and Grandmaster into open-end funds. UTI was followed by Kothari by converting Bluechip into an open-end fund. GIC Mutual fund has recently converted its Growth Plus (II) into an open-end fund while LICMF shortly plans to convert Dhanavikas into an open-end fund. After converting its Magnum Multiplier Scheme '90 into an open end fund in January, SBI Mutual fund is converting its MagnumMultiplier Plus Scheme '93 into an open-end fund from April 1, 1998. The latest NAV of the scheme is Rs 12.22 .
Dhanvarsha 12 from LICMF
While LIC MF faces a short fall of around Rs 135 crore between targeted and actual returns in Dhanavarsha (4), it is launching another assured income fund, Dhanavarsha 12. The new scheme is to open for subscription from April 1 while Dhanavarsha (4) comes up for redemption on March 31, 1998.
