The sources, however, clarified that the existing closed-ended MIPs wouldcontinue till the open-ended MIP is established. The strongest selling pointof MIPs marketed by UTI was its assured returns. Fortunately, it has notreneged on the returns assured on various MIPs. But in a competitiveenvironment, assured returns have no relevance, and it is more important tomatch performance and services with industry benchmarks, industry sourcesmaintained.

The popularity of MIPs can be gauged from its share in total mobilisationsmade by UTI. In the current year ending June 30, 2000, MIPs have so farcontributed as much as the flagship US-64's sales of Rs 3,000 crore.Together, they account for nearly 43 per cent of the unit sales in1999-2000.

The other products which have had a sizeable share of collections in thecurrent year are the UTI Bond Fund -- Rs 1,200 crore; UTI G-SEC (gilt) -- Rs 800crore, and equity funds -- Rs 1,600 crore.

The character of MIPs of UTI will undergo a major transformation, both interms of investment and payout features. For instance, the existing MIPs areconstitutionally allowed to invest between 20 and 30 per cent in equityshares.

But under the open-ended plan, the fund manager would have to park at least10 per cent of funds in liquid money market instruments, the sources said.The quantum of liquid assets required to be maintained under the plan wouldagain be determined by the inflows into the scheme. If inflows match orexceed outflows, liquidity remains unaffected, the sources said.

On the equity funds side too, UTI is considering a cut in the number ofschemes which have become open ended, with the exception of Mastershare,which is due for redemption in 2003. However, termination of schemes in theabsence of any specific criteria for winding up makes it a difficultexercise in depressed market conditions, the UTI sources said.

A significant move in this direction has been made with the insertion of aclause in the Mastergrowth scheme, which became open ended this year onmaturity of the original scheme in April 2000. The clause states that thescheme might be terminated by the trustees if the investments under thescheme fall below Rs 1 crore.

It is expected that in future, all other schemes would be subject to thesame criteria, the sources said. They added that there was a precedence inUTI, when the trustees of Colombus Fund, an offshore fund, had to be woundup about five years back, when its corpus shrunk to around $3 millionfollowing sudden, large withdrawals from the fund by foreign investors.