The Trust has decided to sell and redeem units of its equity schemes based on the basis of net asset value of the day on which the application is accepted (upto 2 pm) with effect from November 29. ``The step is in line with the international practices and has been taken to benefit all investors,'' said a UTI release.

UTI has started declaring NAV-based sale and repurchase price on a daily basis for open-end equity schemes. The NAVs were computed on historic basis for 20 schemes till now. However, for sale and repurchase prices received upto November 28, sale and repurchase prices will be absed on historic NAVs.

``UTI has finally realised that the system of historic pricing was causing losses to its large base of long-term, retail investors, whereas while it provided a golden opportunity to short-term traders and investors to earn a quickbuck. This anomaly has now been corrected,'' said an analyst. The funds where units will be sold under the new pricing policy are Masterplus '91, Mastergain '92, Grandmaster '93, Primary Equity Fundd, UGS 10000, UTI Growth Sector Funds - Brand Value Fund, Petro Fund, Services Sector Fund, Pharma Fund and Software Fund.

UTI already has a daily pricing mechanism in its index fund. The funds, where repurchase will be under the new pricing policy are UGS 2000, UGS 5000, Master Equity Plans (the equity linked saving schemes) of 1991 to 1996, US '92 and Equity Opportunity Fund.

Under historic pricing, units are sold at a price linked to `historic' or old NAV. For instance, units of Fund A are sold on November 30 based on the NAV of say, November 28. The normal time lag in the case of most UTI schemes was four days which was later reduced to two days. In the case of its interval fund, UGS 10000, pricing was based on a seven-day old NAV which was later reduced after short-term investors reaped a windfall in thepost-budget period this year.

It may be recalled that units of UGS 10000 were sold at a pre-budget NAV in the first week of March whereas the market had already shot up by around 400 points after the presentation of the budget. The fund had seen a heavy inflow of funds since investors could lock-in funds at a lower NAV.

``Even after accounting for the load, investors made a healthy profit when they exited the fund in the first week of April since the markets were in a bullish mode,'' says an analyst. Being an interval fund, UGS 10000 opens for sale and repurchase of units in the first week of every month and investors usually get allotment of units in a month's time.

``Even in the case of funds with a three-day historic NAV, investors can make profits when markets shoot up by 150-200 points in a day, though such opportunities are rare. Howewver, one must get allotment of units at a short notice,'' points out an industry observer.