Mumbai, June 24: The UTI Index Equity fund, scheduled to close on Wednesday has received a rather poor response. Sources say that the target of Rs 150 crore is unlikely to be met. In fact UTI is now expecting to garner less than Rs 75 crore.

After a year of floating income schemes because investors were staying away from the stock market, UTI had finally launched the equity fund in May hoping that the investor appetite was ready for equity after a good budget and other market-friendly measures announced by the authorities. The market has in fact been going up for the last one month and the index has crossed the 4000 mark. "From the response to the scheme, it seems that investors are not yet ready to take the plunge into the equity segment", said a UTI official.

In fact, UTI's previous attempt at an equity scheme- the equity opportunity fund which was floated at the same time last year managed to collect just a little over Rs 20 crore. The equity index scheme will be the only dent in UTI's collection spree, from fresh offerings this year. The two monthly income plans launched in the first half of this year met with a tremendous response collecting an unprecedented Rs 1200 crore each, on the back of guaranteed returns for the entire life of the scheme. UTI officials say that it is likely that the investors have confused the scheme with an index fund, the concept of which is not very familiar with Indian investors and hence unwelcome. UTI had launched an index fund for overseas investors in February this year.

The equity index fund although named thus, only invests in the blue chip companies of the BSE index and the NSE-50. But unlike the index fund, this scheme uses these indices just as a universe for selection of scrips and does not intend to replicate or track them fully. The scheme in fact intended to invest only in those scrips in these indices which have given investors a consistent return over the years.

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