KEY INFORMATION MEMORANDUM UTI FOCUSED EQUITY FUND (An Open Ended Equity Scheme Investing in Maximum 30 Stocks Across Market Caps)
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KEY INFORMATION MEMORANDUM UTI FOCUSED EQUITY FUND (An open ended equity scheme investing in maximum 30 stocks across market caps) THIS PRODUCT IS SUITABLE FOR INVESTORS WHO ARE SEEKING*: v Long term capital Growth v Investment in equity & equity related securities across market capitalization in maximum 30 stocks Product labelling assigned during the NFO is based on internal assessment of the scheme characteristics or model portfolio and the same may vary post NFO when the actual investments are made. * Investors should consult their financial advisers if in doubt about whether the product is suitable for them Offer of Units of Rs. 10/- each during New Fund Offer (NFO) and Continuous Offer of Units at NAV based prices New Fund Offer will not be kept open for more than 15 days New Fund Offer Opens on : Wednesday, August 4, 2021 New Fund Offer Closes on : Wednesday, August 18, 2021 Scheme Re-opens on : Thursday, August 26, 2021 This Key Information Memorandum (KIM) sets forth the information, which a prospective investor ought to know before investing. For further details of the scheme/Mutual Fund, due diligence certificate by the AMC, Key Personnel, Investors’ rights & services, risk factors, penalties & pending litigations etc. investors should, before investment, refer to the Scheme Information Document (SID) and Statement of Additional Information (SAI) available free of cost at any of the UTI Financial Centres or distributors or from the website www.utimf.com. The scheme particulars have been prepared in accordance with Securities and Exchange Board of India (Mutual Funds) Regulations 1996, as amended till date, and filed with Securities and Exchange Board of India (SEBI). The units being offered for public subscription have not been approved or disapproved by SEBI, nor has SEBI certified the accuracy or adequacy of this KIM. SPONSORS TRUSTEE INVESTMENT MANAGER State Bank of India, Punjab National Bank, Bank UTI Trustee Co. (P) Ltd. UTI Asset Management Co. Ltd. of Baroda and Life Insurance Corporation of India (Incorporated under the Companies Act, 1956) (Incorporated under the Companies Act, 1956) (Liability of sponsors limited to ` 10,000/-) KEY INFORMATION MEMORANDUM UTI FOCUSED EQUITY FUND (An open ended equity scheme investing in maximum 30 stocks across market caps) Name of the scheme UTI Focused Equity Fund Category of Scheme Focused Fund Type of Scheme An open ended equity scheme investing in maximum 30 stocks across market caps. Investment Objective The investment objective of the scheme is to generate long term capital appreciation by investing in equity & equity related instruments of maximum 30 stocks across market caps. However, there can be no assurance or guarantee that the investment objective of the scheme would be achieved. Asset Allocation Pattern of The Funds collected under the Scheme shall generally be invested consistent with the objective of the Scheme in the following manner: the scheme Indicative Allocation (% of total assets) Instruments Risk Profile Maximum (%) Minimum (%) Equity and equity related instruments (Maximum 30 stocks) 65% 100% High Debt and Money Market instruments including securitized debt* 0% 25% Low to Medium Units issued by REITs & InvITs 0% 10% Medium to High *Debt instruments shall be deemed to include securitised debts (excluding foreign securitised debt) and investment in securitised debts may be up to 50% of Debt and Money Market instruments. The investment of mutual fund schemes in structured obligations and credit enhancements shall not exceed 10% of the debt portfolio of the schemes and the group exposure in such instruments shall not exceed 5% of the debt portfolio of the schemes: The Scheme may invest in Repo in corporate debt. Gross exposure of the scheme to repo transactions in corporate debt securities shall not be more than 10% of the net asset scheme or such other limits as may be permitted by SEBI from time to time. The Scheme can take exposure up to 20% of its net assets in securities lending. During NFO period, the scheme may intend to invest an amount of upto US$ 7 million. This limit will be valid for a period of six months from the date of closure of NFO. Thereafter, on an on-going basis the investment headroom of 20% of the average AUM would be allowed to invest in Overseas securities / Overseas ETFs of the previous three calendar months would be available to the Mutual Fund for that month to invest in Overseas securities / Overseas ETFs subject to maximum limits specified by SEBI from time to time. The Scheme will not engage in Short selling and Credit default Swap. Investment in equities would be through primary as well as secondary market. The scheme does not intend to invest in Additional Tier I bonds and Tier 2 bonds issued under Basel III framework having special features as mentioned in SEBI/ circular HO/IMD/DF4/CIR/P/2021/032 dated March 10, 2021. The Fund may use derivative instruments like Stock/Index Futures, Interest Rate Swaps, Interest Rate futures and Forward Rate Agreements or such other derivative instruments as may be introduced from time to time for the purpose of hedging and portfolio balancing, or to undertake any other strategy within a limit of 50% of the Net Assets of the scheme. The cumulative gross exposure through equity, debt, derivative positions (including fixed income derivatives), repo transactions, Real Estate Investment Trusts (REITs), Infrastructure Investment Trusts (InvITs), such other securities/ assets as may be permitted by the SEBI from time to time should not exceed 100% of the net assets of the scheme in accordance with SEBI Cir. SEBI/HO/IMD/DF2/CIR/P/2021/024 dated March 04, 2021. The Scheme may seek investment opportunity in the ADR/GDR/Foreign Securities, in accordance with guidelines stipulated in this regard by SEBI and RBI from time to time. Under normal circumstances, the scheme shall not have an exposure of more than 10% of its net assets in ADR/GDR/ foreign securities subject to regulatory limits. Investment in Foreign Securities shall be in compliance with requirement of SEBI circular dated September 26, 2007, SEBI Circular No. SEBI/HO/IMD/DF3/CIR/P/2020/225 dated November 05, 2020, SEBI/HO/IMD/IMD-II/DOF3/P/CIR/2021/571 dated June 03, 2021 and other applicable regulatory guidelines. The Scheme may invest in derivatives to engage in permitted currency hedging transactions with an intention to reduce exchange rate fluctuations between the currency of the Scheme (INR) and the foreign currency exposure. The above investment pattern is only indicative and may be changed by the Fund Manager for a short term period on defensive considerations, keeping in view the market conditions, market opportunities, applicable SEBI (MF) Regulations 1996, legislative amendments and other political and economic factors, the intention being at all times to seek to protect the interests of the Unit holders. Rebalancing of the portfolio will be done when the asset allocation falls outside the range given above. If the exposure falls outside the above mentioned asset allocation pattern, it will be restored within 30 days. If owing to adverse market conditions or with the view to protect the interest of the investors, the fund manager is not able to rebalance the asset allocation within the above mentioned period of 30 days, the same shall be reported to the Internal Investment Committee. The Internal Investment Committee shall then decide the further course of action. Investment in Money Market Instruments: Investment in money market instruments including Triparty Repo on Government Securities or treasury bill, Commercial Papers, Certificate of Deposits, BRDS, Treasury Bills, Repo etc. will be made to meet the liquidity needs of the scheme manage desired duration. The AMC, may create segregated portfolio in case of a credit event in respect of debt and money market instruments at issuer level i.e. downgrade in credit rating by a SEBI registered Credit Rating Agency (CRA). (subject to guideline specified by SEBI which may change from time to time). The creation of segregated portfolio shall be optional and at the discretion of UTI AMC. Risk Profile of the Scheme Mutual Fund investments are subject to market risks. Please read the SID carefully for details on risk factors before investment. Past performance of the Sponsors / AMC / Mutual Fund does not guarantee future performance of the scheme. Safety net or guarantee provided – The Scheme does not provide any guarantee or assured return. UTI Focused Equity Fund is only the name of the scheme and does not in any manner indicate either the quality of the scheme or its future prospects or returns. There may be instances where no IDCW distribution could be made. Scheme Specific Risk Factors: The Scheme seeks to generate long term capital appreciation/ income by investing in equity & equity related instruments of up to 30 companies. This concentrated nature of the portfolio may result in higher levels of volatility vis-à-vis other diversified equity oriented schemes. Since the scheme will invest in not more than 30 stocks, it is also expected to have higher market liquidity risk compared to a regular diversified equity scheme. 2 Plans and Options Offered The scheme offers following Plans Regular Plan Direct Plan Both the plans offer following options (i) Growth Option (ii) Payout of Income Distribution cum capital withdrawal option In case no option is indicated in the application form, then the default option will be the Growth Option. As per SEBI circular SEBI/HO/IMD/DF3/CIR/P/2020/194