ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Lessons of UTI Fiasco

THE market had been whispering about the state of affairs in the Unit Trust of India (UTI) for some months now, but even it seems to have been surprised by the numbers as they have come out. The disclosures by the auditors on income, dividend, asset value and reserves of the highly popular Unit 64 scheme have been truly astounding. For millions of investors, the Unit 64 scheme has been perceived as a source of unfailing liquidity and steady income with the back-up of carefully chosen assets. Over the years, however, the scheme's asset composition has perceptibly changed, with the equity component reportedly reaching a level close to 70 per cent In allowing the tilting of the fund towards equity in a volatile market, the trustees could not but have been aware that they were taking grave risks, putting in jeopardy the long- term interests of their faithful investors.

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