UTI to come out with ETF today
Mumbai: UTI Mutual Fund will launch an exchange-traded fund (ETF), S&P CNX Nifty UTI Notional Depository Receipts Scheme (Sunder) today. Sunder is a passively managed open-ended ETF, with the objective to provide investment returns that, before expenses, closely correspond to the performance and yield of the basket of securities underlying the S&P CNX Nifty Index. The initial offer for the scheme will be open between July 7 and July 11. It will reopen on July 14 at the prevailing NAV. Sunder will have all benefits of index funds such as diversification, low cost and a transparent portfolio and the flexibility of trading like a share thus it provides the best features of both open-ended fund and a listed stock, the release said. The face value of each unit of Sunder is Rs 100 and the valuation of each unit will be approximately equal to 1/10th of the value of S&P CNX Nifty. The shares will initially be listed on NSE. According to a company release, UTI Mutual Fund will issue and redeem the Sunder share only in creation unit size (minimum application size is 10,000 units plus in multiples of 2,000 units in case of `Authorised Participants' and 5,00,000 units plus in multiples of 20,000 units for other investors) in exchange for S&P CNX Nifty Index securities (portfolio deposit), cash component and balancing amount. Minimum trading lot for Sunder share in the markets will be one unit and acceptance and delivery of the underlying securities and issue and repurchase of Sunder shares by UTI will be in electronic (dematerialised) form.
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