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Wednesday, April 08, 2009

Reliance Index Fund– Nifty Plan files offer document with Sebi

It is an open ended index linked scheme

Reliance Mutual Fund has filed offer document with Securities and Exchange Board of India (Sebi) to launch Reliance Index Fund– Nifty Plan, an open-ended index linked Scheme. The face value of the new issue will be Rs 10 per unit.

The primary investment objective of the scheme is to replicate the composition of the Nifty, with a view to generate returns that are commensurate with the performance of the Nifty, subject to tracking errors.

Reliance Index Fund – Nifty Plan will have Growth Plan and Dividend Plan. Growth Plan has two options: Growth Option and Bonus Option. Dividend Plan will have two options of Dividend Payout Option and Dividend Re-investment Option.

The scheme will invest 95-100% in equities and equity related securities covered by the Nifty. It will invest up to 5% in Cash/CBLO/Repo & Reverse Repo & Money Market instruments (CPs, CDs, T-Bills, and Mibor linked instruments with daily Put/Call options & overnight Interest rate Reset Linked Instruments), but excluding Subscription and Redemption cash flow. Subscription Cash Flow is the subscription money in transit before deployment and Redemption Cash Flow is the money kept aside for meeting redemptions.

The portion of the Scheme's portfolio invested in each type of security listed above may vary in accordance with economic conditions, interest rates, liquidity, and other relevant considerations, including the risks associated with each investment. The Scheme will, in order to reduce the risks associated with any one security, utilize a variety of investments. The Scheme will not invest in securitised papers and in foreign securities.

The fund will not levy entry load.

For subscription of less than Rs. 1 crore per purchase transaction, 1% will be the exit load if redeemed/switched out on or before completion of 365 days from the date of allotment while no exit load for redemption after completion of 365 days from the date of allotment.

For subscription of Rs. 1 crore and above per purchase transaction, 1% will be the exit load if redeemed/switched out on or before completion of 7 days from the date of allotment while no exit load for redemption after completion of 7 days from the date of allotment.

The minimum application amount will be Rs 5,000 and multiples of Re 1 thereafter.

The Fund seeks to collect a minimum target amount of Rs 1 lakh under during NFO.

Benchmark Index for the scheme will be S&P CNX Nifty.

Sailesh Raj Bhan will manage the fund.

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