Research on the movement of market indices between 1994 and 1998 shows that the 30-share BSE Sensex has breached the 4,000-mark at least five times. It touched a high of 4,643 points in September, 1994, a yearly high of 4,131 points in June, 1996, another high of 4,605 points in August 1997 and 4,322 points recently in April 1998.

``Some of the recent research suggests that the market lives a life of its own `independence' not touched by either the corporate profits and the state of the economy,'' said Ajit Sanghvi, who is considered to be an expert on identifying the turning point in the market.

MIF, an open-ended passive index fund which has been modelled on the Sensex and has a minimum investment limit of Rs 5,000, has been targeting small investors who cannot risk exposing their savings to a wide range ofindustries.

The primary objective of the plan, according to UTI officials, is to invest the funds mobilised in securities of companies comprising the Sensex in the same weightage as that of the index-based stocks. This has been done to help minimise the difference in performance between the Sensex and the fund.

The mutual fund behemoth has also decided to keep the tracking error at the minimum, which would ensure that investors get an attractive repurchase value unlike most of other mutual funds.

Market pundits say the fund has hit the market at a time when share prices have almost bottomed out and the stocks of some of the fastest growing industries such as pharma, fast-moving consumer goods and infotech, are available at attractive valuations.

The Sensex comprises eight industries which allow UTI as well as the industry to balance their risk. Interestingly, despite a flat budget and the current bearish phase that has gripped the market, most fund managers are certain that the Sensex should touch ahigh of 4,000 level by the year-end.

``UTI has offered an excellent scheme which could even help banks to mobilise their excessive funds,'' said Sandeep Shah, vice-president of Kotak Securities.