``The retired non-tax payers would move out of the US-64. And the discerning urban investors have already moved into higher yielding low-risk investments. The trusts and charitable institutions would give it a second thought and move into gilt funds.'' says a fund manager.

And according to brokers, the undertone of the market is bullish. Now even if the UTI sells in the market to meet the redemption pressure, the market would be able to absorb the selling pressure.

``With the post-tax yield coming down to 9.28 per cent for the institutional investors compared to 9.62 per centlast year, the difference is marginal and these lot is unlikely to rush out of the scheme,'' said a another fund manager.

"The non-tax paying population of US-64 are likely to move out now. There are two reasons. One, the US-64 scheme has always been perceived as a risk free income scheme but this is now going to change. And second, the income that these non-tax paying population would now earn is very less compared to other investment avenues", said another fund manager.

An intermediary who sells financial products to investors says that for the risk averse investor preference would definitely be for relatively safer fixed income avenues like bank fixed deposits or bonds floated by financial institutions. "These securities typically give returns ranging from 12 to 14 per cent per annum for a five year period. Although the investor would have to pay tax on this investment he would have an assured return. If the investment is made in a cumulative scheme with interest compounded on a quarterly basis,annualised yields could range from 12.55 to 14.75 per cent.

The risk associated with the US-64 scheme has increased in the minds of the investors but the retail investor would only gradually get out of UTI", he added.

Rajaram Ajgaonkar, a chartered accountant said that based on the current sale price of Rs 13.50 the investor would get a yield of 10 per cent which is not bad. About the other investing avenues, Ajgaonkar said, "After the budget the dividends from mutual funds have become tax-free for the investors. On the other hand, well managed asset management companies have given on an average a tax free yield of around 11 per cent (as they pay 10 per cent tax to the government now). For a risk averse investor there is an option of investing in gilt funds now. And for the risk-takers some equity funds, some of which have given high returns this year, are a really attractive option", added Ajgaonkar.

The chief investment officer of a private sector mutual fund said that the market might get a jilt inthe next couple of weeks. "We might see investors moving out of the US-64 scheme in a big way and UTI coming to market owing to redemption pressure. Investors would book profits at the US-64 counter and move to fund with better liquidity and giving good returns".