It is an open-ended equity scheme
Reliance Mutual Fund has filed offer document with Securities and Exchange Board of India (Sebi) to launch Reliance Micro Cap Fund, an open-ended equity scheme. The face value of the new issue will be Rs 10 per unit.
The primary investment objective of the scheme is to generate long term capital appreciation by investing predominantly in equity and equity related instruments of micro cap companies and the secondary objective is to generate consistent returns by investing in debt and money market securities.
Features of the scheme:
Investment option: Reliance Micro Cap Fund offers retail plan and institutional plan and each plan will have growth plan and dividend plan.
Growth Plan: The Growth Plan is designed for investors interested in capital appreciation on their investment and not in regular income. The Growth Plan has two options: Growth Option and Bonus Option.
Dividend Plan: The Dividend Plan has been designed for investors who require regular income in the form of dividends. Under the Dividend Plan, the Fund will endeavor to make regular dividend payments to the unit holders. Dividend will be distributed from the available distributable surplus after the deduction of TDS and applicable surcharge, if any.
Dividend Plan has two options: Dividend payout option and dividend re-investment Option.
Asset allocation: The scheme will invest 65-100% in equities and equity related securities of micro cap companies including derivatives with medium to high-risk profile. It will have investment exposure to equities and equity related securities of any other companies including derivatives with medium to high risk profile. Investments in debt and money market securities (including investments in securitised debt up to 30%) shall be up to 35% of total assets.
The scheme proposes to invest at least 65% of the corpus in Equity & equity related instruments of micro-cap companies which may go up to 100% of the corpus. The investment in Equity & equity related instruments of any other companies other than micro cap companies will be in the range of 0-35% of the corpus.
Load structure:
For retail plan: Entry load: For subscription below Rs. 2 crore, 2.25% will be the entry load, for subscription of Rs 2 crore and above and below Rs 5 crore, 1.25% will be the entry load. The scheme will not ask entry load for subscription amount of Rs 5 crore and above.
Exit load: For subscription of less than Rs 5 crore per purchase transaction, 3% will be the exit load if redeemed / switched before completion 12 months from the date of allotment. 2% will be the exit load for redemption done between 12 months –1 day and on or before completion of 24 months from moth date of allotment. The fund will levy 1% exit load for redemption / switched between 24 months –1 day and on or before completion of 36 months from the date of allotment.
While, for subscription of more than Rs 5 crore, no exit load will be charged.
For institutional plan: There will be no entry and exit load.
Minimum application amount: For retail plan, the minimum application amount will be Rs 5,000 and multiples of Re 1 thereafter. For institutional investors, the minimum application amount will be Rs 5 crore and in multiples of Re 1 thereafter.
Minimum target amount: The Fund seeks to collect a minimum target amount of Rs 1 crore under during NFO. This is the minimum amount required to operate the scheme.
Benchmark index: Benchmark Index for the scheme will be BSE Small Cap Index.
Fund Manager: Sunil Singhania will manage the fund.
