Fund houses are getting innovative when it comes to product design. The latest in the list is UTI Mutual Fund, which has bundled three of its tax-saving schemes – ELSS, retirement scheme and ULIP to enable investors avail tax benefits under section 80C.
Sharing the rationale behind launching this plan, Suraj Kaeley, Group President - Sales & Marketing, UTI Mutual Fund said that his fund house aims to provide one stop solution for all tax planning needs. “If you look at 80 C basket, there are schemes which provide retirement investments like NPS and PPF, insurance like ULIPs and investment like ELSS. We are privilege to have all three products with us. UTI Smart Plan aims to provide benefits of wealth creation, protection and retirement to investors coupled with tax benefits.”
UTI Smart Plan consists of three MF schemes - UTI Long Term Advantage Fund- Series V (ELSS), UTI Unit Linked Insurance Plan and UTI Retirement Benefit Pension Fund.
UTI Long Term Advantage Fund is 10-year close-ended ELSS. To differentiate this fund from open-ended ELSS, the fund will follow a focused strategy by concentrating on 20 to 30 stocks. Typically, open-ended ELSSs follow a more diversified strategy that could include over 50 stocks. On portfolio construction, the fund proposes to be overweight on infrastructure stocks and underweighted on banking, IT and pharma. “Infrastructure stocks are available at attractive valuations. These stocks will benefit from India’s growth story. Given the long term investment horizon of the fund, it is suitable for investors looking to benefit from distinctive and concentrated portfolio primarily focussed on the business cycle and complements current investor portfolios that are pre-dominantly geared towards non-cyclicals,” said Kaeley.
UTI ULIP is the first insurance linked mutual fund product in the country. Launched in 1971, the scheme has more than 2.7 lakh investor accounts.
The scheme offers sum assured of upto Rs.15 lakh coupled with other benefits such as accident insurance cover and a balanced portfolio of debt and equity. The fund doesn’t charge allocation fee like other ULIPs.
UTI Retirement Benefit Pension Fund is a mutual fund linked retirement plan (MFLRP) and is essentially a debt oriented hybrid fund. “Equity portion under this scheme is actively managed. Hence, it is better than NPS where equity portion is passively managed. I think investors who have moderate risk appetite should consider this fund,” said Kaeley.
Investors can decide asset allocation between these three funds on their own based on risk appetite and financial goals.
