Subramanyam, who took over as UTI chairman on Tuesday, said he would press for the launch of the trust's millenium scheme, targeted at non-resident Indian investors, and carry his experience in development banking to get into project-financing through well-structured mutual fund products.

Speaking to The Financial Express after assuming charge, Subramanyam, who will be at the helm of the country's largest mutual fund for the next four years, said his target was to achieve a growth of 20 per cent a year in the amount of the trust's investible funds.

"If one can achieve the high rate of growth, then there is noreason why UTI would not be among the largest mutual funds in the world," said Subramanyam.

But more important for the markets, Subramanyam is tilted towards investments in equity, which means that a large part of trust's funds will flow into equities.

"The preference will be on investment in equity as it has been seen that returns generated by equities are much higher than those generated by debt. The current depressed conditions in the market, which have led to investors not getting good returns, are an aberration which will get corrected," said Subramanyam.

Subramanyam, in fact, justified the current product mix of the trust's flagship scheme, US-64, which currently has 65 per cent of its investments in equity and 35 per cent in debt. There were also plans to restructure the portfolio mix to about 50-50.

"Even if the mix stays at the current level, it will remain a well-balanced fund. In fact, in the current market we will continue to further pick up equity given the good valuations available. Thisfits in well with the policy of picking up stocks when they are down and selling them when they rise. This is the right time to do so," said Subramanyam.

"In doing this, we will also help the market stabilise. The market perceives Unit Trust to have a huge investible funds, and when it knows that the trust will be active in the market there will be stability," said Subramanyam, while making a point that the trust is not, as is wrongly perceived, driven by the government on its daily investment decisions.

Subramanyam said he would take up the issue of the UTI Millenium Scheme with the finance ministry. "We will try and convince them about the scheme," he said, reacting to news reports suggesting that the ministry is no longer keen on the launch of the scheme.

Subramanyam plans to propel the trust back into the arena of project finance, but with a difference. The activity will be undertaken through structured mutual-fund products.

"One way of doing this is to invest in secured debentures, which aredesigned towards financing infrastructure projects. The second way is to come out with products which have a maturity of about 10-15 years. The mobilisation from these instruments could be ploughed into infrastructure projects, and that this information could be told to investors upfront", he said.

He cited examples of schemes like the Children's Gift Growth Fund (CGGF). In such schemes where the funds are kept with the trust for 15-18 years it would make good commercial sense to channelise them into infrastructure projects. "In this way UTI would be instrumental in developing long term debt market in the country and will be the most effective way to channelise savings into infrastructure through the mutual fund route", he said.

As regards the Trust's foray into insurance, Subramanyam said that UTI would look at tying-up with a foreign partner to provide the technology. UTI would be more keen on providing Life Insurance.

As regards the growth of the depository, Subramanyam said that in its capacity ofbeing a major shareholder in the National Securities Depository Ltd (NSDL), UTI will strive for the growth of the depository in India.

"The recent lowering of custody charges by NSDL has provided UTI an opportunity to dematerialise more of its holdings. We are also keen to kick-start stock lending", he said.

On the hotly debated subject of providing assured returns to investors Subramanayam said that in today's falling market it is the assured return schemes that has been able to retain the investors interest. "The investor welcomes an assured return even if he has to forgo 1-2 per cent in returns as compared to equity as the investment is secured. But moving forward, over a period of time the revival of capital markets will itself pave the way for investment in equity markets away from assured returns. This is because it is time tested that equities give better returns over time than debt".