UTI has been able to raise Rs 3924 crore compared with the total industry collections, which stand at a record Rs 8762 crore in the first quarter of the current fiscal, as per figures compiled by the Association of Mutual Funds of India (Amfi). The fund's share in the total industry collections had fallen to 54.11 per cent in fiscal 1998-99 from a high of 73.51 per cent in fiscal 1997-98.

Out of the total mutual fund collections of Rs 18,701 crore in fiscal 1998, UTI's share was Rs 13,748 crore. In the next fiscal, UTI mobilised Rs 11679 crore of the total Rs 21,377 crore mobilised by the mutual fund industry.

UTI's pre-dominance in fundcollection in the two fiscal was mainly due to the huge chunk of funds garnered in its assured returns schemes.

The concept of assured returns has now come under scrutiny and the fund is under pressure to do away with these schemes. UTI has already announced plans to henceforth launch schemes with assured returns for only one year, as against all five years earlier.

Besides, UTI's performance has also been affected by strong competition from private sector mutual funds and the controversy over `negative' reserves of its US-64 scheme. The fallout of this declaration was not only a drastic fall in collections, but a massive increase in its redemptions in the third quarter of the last fiscal.

However, the situation improved following a rise in the net asset value of US-64 due to a sharp rise in the Sensex in the fourth quarter of FY 1999. The percentage of redemptions from UTI to the total industry levels, which stood at 66.31 per cent in the first nine months of the last fiscal, fell to 50 per cent in thefourth quarter, as per Amfi figures.

UTI's redemptions stood at 11,179 crore during the first nine months of FY 1999 as against the total industry redemptions of 16,858 crore. However, in the last quarter, the fund's redemptions stood at Rs 2185 crore as against the total industry redemptions of Rs 4364 crore.

Private sector players have emerged stronger in the past two years due to their strong performances. These funds have garnered Rs 4273 crore or 49 per cent of the total collections in the first quarter of fiscal 2000. The sector's contribution to the total collections in FY 1998 was 37 per cent (or Rs 796 crore).

A major reason for the improving performance of these private sector funds is their low corpus, investment in specific scrips and minimal NPAs on on account of investments in initial public offerings, Amfi chairman A P Kurian said. Also these funds have been offering unique schemes to attract greater investor attention, he added.