Addressing a press conference here on Tuesday, UTI executive director BG Daga said "we have filed the draft prospectus with the Securities and Exchange Board of India (Sebi) and hope to enter the market in the begining of 2001."

Exchange traded funds(ETF) are passively managed funds tracking and investing in the stocks of a particular benchmark index. The unit called Sunder shares will have a face value of Rs 10 and will be issued at a premium equivalent to the difference between the closing value of the Sensex on the date of acceptance and the face value of Rs 10 and would be traded at 1/100th of the benchmark index.

If the closing value of Sensex is 4000 then the price of the Sunder share will be Rs 40, of which Rs 30 will the premium.

Mr Daga said since the minimum investment in the beginning will be 2.5 lakh units, the fund is targeting the institutional players, banks, insurance company and high networth clients.

The advantage of this fund over other index fund is that there will not be any tracking error or impact cost. The investor will also have the option to convert the Sunder shares into Sensex shares in the same proportion as in the benchmark index.