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UTI cuts equity in flagship scheme

State-run Unit Trust of India, the nation's biggest fund manager, said it had reduced the equity exposure of its flagship scheme, US-64, to nearly 60 per cent on May 31, 2002 from around 69 per cent on June 30, 2001.

In a statement issued late on Tuesday, UTI said it will further lower US-64's equity component to between 25 and 55 per cent of total assets by December-end, in accordance with a commitment to restructure the troubled scheme -- UTI's biggest.

UTI, which accounts for more than half the domestic mutual fund industry's assets, rattled investors in June 2001, when it announced it was suspending redemptions in US-64 for the rest of the year.

It partially revised its decision after a huge public outcry and an uproar in Parliament.

On June 30, 2001, US-64's assets, which account for a fifth of UTI's total assets, stood at Rs 161.9 billion ($3.3 billion). By the end of May 2002, the scheme's assets were worth Rs 123.15 billion ($2.5 billion).

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