Advantages offered by the UTI for small investors are:
(i) Considerably reduced risk since funds are invested in a balanced and well distribute portfolio;
(ii) The benefit of expert management;
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(iii) A steady income and
(iv) Liquidity.
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The Trust’s investment in any one company is restricted to certain specified limits in the interests of diversification. Its investment is expected to cover a judiciously selected diverse portfolio of securities designed to give to the Unit holders security of capital, besides reasonable return and capital appreciation.
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Underwriting the public issues of shares and debentures, direct subscription to the shares and debentures and subscription to the privately placed debentures are the usual forms of assistance provided by the UTI to the industries.
The UTI examines the proposals for underwritings from the point of view of financial viability of projects, prospective earnings from investments to the Trust and prospects of capital appreciation. Consistent with these considerations, the Trust underwrites public issues of equity shares, preference shares and debentures.
The Trust has also joined the Inter Institutional Meeting Forum of all India financial institutions, viz., IDBI, IFCI, ICICI, LIC and GIC under the aegis of the IDBI and the UTI indicates its intention to provide financial assistance to the projects in these meetings. For such assistance, the Trust follows more or less the norms prescribed by the IDBI.
Particularly in recent years, there has been a very substantial increase in the investible funds of the Trust. Several skillfully designed new savings schemes which have enabled the tapping of the savings potentials of various segments have significantly contributed to this growth.
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Apart from registering appreciable growth in sales, number of unit holding accounts, investible resources, income and reserves, the UTI has also been one of the significant participants in the share capital of new financial organisations such as Infrastructure Leasing and Financial Services Ltd., Discount and Finance House of India Ltd., Credit Rating Information Services of India Ltd., Stock Holding Corporation of India Ltd. and Can Fin Homes Ltd., which are expected to play a vital role in the improvement and development of the money and capital markets and housing finance in India.