Query regarding Nifty Index Fund

Hi All,

Looking for some help understanding UTI Nifty Fund

Following is the Fact Sheet of the Funds at UTI
UTI Nifty Fund is on Page 22 :



  1. The inception of the fund was on 6th March 2000. Over the period of roughly 18 years, there was 1 dividend issued on 20 November 2017 (Page 55). The Nifty companies should have given dividends over the past 18 years. Any idea on where the dividends are distributed? I understand that the fund provides 3 options a. growth b. dividend - reinvestment c. dividend - payout.
    So, where might be the history of dividends over last 18 years?

Other funds of UTI in the same above linked documents have a very clear and defined history of dividends from similar time frames. Why does this specific fund not release any dividends?

2. Nifty Index Fund

As per the same suggests, the goal of the fund is to match the Nifty companies. Looking at the performance over the last 16 years as shown in the diagram below (Page 24), the value of same funds invested in March 2002, would be much lower (76,462 in UTI vs Nifty 50). If this index fund was expected to track Nifty 50, then why is the performance so drastically different?

**I can understand a difference of a few basis points, but why is there a difference of 17% between the two performances? **

What am I missing here ?

Upon asking the query to UTI customer service, following is the response that I got.

At the outset, we would like to thank you for your e-mail to UTI Customer Care dated 2nd Aug’19.

As per your email, we appreciate your valuable feedback. As Mutual fund investments are subject to market risk, its depend on market status. Our fund manager always seeks better returns for our investors in a manner to get good growth out of his manage scheme.

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There could be multiple reasons. 1) Fees charged by AMC 2) Expenses during rebalance of portfolio when a nifty stock is replaced 3) Expenses for AMC such as brokerage, regulatory, etc .

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Shouldn’t Point 1) & 3) should be incorporated in Expense Ratio and Point 2) can be Tracking error ?

Question remains :
a) Are there fees that are over and above this ? The difference between Nifty 50 and UTI Nifty Index Fund is very high.
b) Where did all the Dividends go ?

Looking at your chart, the issue seems to be around March 2014. If we look at last few years, everything looks good.

Digging through its product page, realized that this fund has had highest tracking error since its inception. A staggering 1.67%. I think something might have been triggered in March 2014.


Additionally was surprised at the composition of the fund. I was under the impression that Nifty Index Fund will always track to Nifty 100%. Seems like this might not necessarily be true and there is an optionality of Money Market instruments.

And the question remains, where the heck is Dividend History of all this years.

Dividend%20History Fund%20Composition

Earlier the UTI Nifty Index fund used to have 0.5% expense ratio. But at that time even the Benchmark Nifty Index Fund (Which is now the Reliance Nifty ETF) had the same expense ratio.

Is it possible to compare returns of UTI Nifty Fund with the Reliance ETF fund (instead of the Nifty Index itself) for a common time frame? That may give a better picture.

I did a comparison of UTI Nifty Index Mutual Fund & Reliance Nifty BeeS ETF

UTI Nifty Mutual Fund
Dec 31 2003 price - 11.78
Jan 02 2019 price - 70.08
Average Growth over 15 years - 12.7% per annum

Reliance Nifty ETF
Jan 02 2004 price - 193.51
Jan 1 2019 price - 1139.84
Annual Growth over 15 years - 12.6% per annum

I have ignored dividends - neither of these give much dividends, I think.

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