UTI International has launched a new balanced fund – UTI India Balanced Fund targeting all class of investors – including the high-net-worth investors. The new fund invests in both Indian equities and debt, according to Praveen Jagwani, CEO of UTI International Singapore.
Jagwani told Citywire Asia that the fund is created to allow investors participation into India’s economy and growth story through risk-adjusted Indian equities exposure using an active asset allocation strategy, while providing downside protection through income from Indian debt. India remains the fastest growing large economy in the world with GDP growth rates of 7% and 8% for the foreseeable future. “Exposure to Indian equities is rapidly becoming part of a core growth allocation”, Jagwani said.
Meanwhile, the Indian bond market is the fourth largest in Asia and benchmark 10-year government bond currently yields 7.75%, he added. Indian debt is predominantly investment grade, lowly correlated with US and European bonds and not easily accessible for foreign investors. ‘Adding Indian debt to a global bond portfolio will materially improve the fund’s risk adjusted return,’ he said.
Targeted at retail clients, family offices and institutional investors, the fund will be distributed through banks, independent financial advisers and fund platforms. Jagwani said the new fund aims to generate alpha through dynamic asset allocation between debt and equity, with quarterly re balancing, as well as active management of the equity and fixed income portfolios using our flagship strategies. The new fund is available with option of accumulation or dividend distribution share-class. Dividend distribution share-class of approximately 4.8% per annum with payments of 1.2% made quarterly. ‘We aim to make the first dividend payment within the first year of the fund launch,’ he said.