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Tuesday, May 05, 2009

Reliance Target Appreciation Fund files offer document with Sebi

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 Target Appreciation 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 capital appreciation from a portfolio that is invested predominantly in equity and equity related instruments and providing investors with payout at predefined market levels and the secondary objective is to generate consistent returns by investing in debt and money market securities.

Features of the scheme:

Investment option: Reliance Target Appreciation Fund offers only growth option. Accordingly, the Scheme will not declare dividends. The income earned on the Scheme's corpus will remain invested in the Growth Option. There will be no distribution of income and the returns to the investor is only by way of capital gains/ appreciation, if any, through redemption at applicable NAV of the units held by them.

Asset allocation: The scheme will invest 65-100% in equity and equity related securities including derivative 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 in equity & equity related instruments of the Top 100 companies by market capitalization which would include well managed, high quality large cap companies that have the potential to grow at a reasonable rate in the long term.

Load structure:

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: Automatic and compulsory redemptions processed on account of Specified Trigger Date will be without any load (the date on which the closing level of index reaches or crosses the predefined appreciation level of Sensex). However voluntary redemptions by the investors on the Specified Trigger Date or any other date will have the following load;

For subscription of less than Rs 5 crore per purchase transaction, 1% will be the exit load if redeemed / switched before completion 1 year from the date of allotment. No exit load will be charged if redeemed/switched after completion of 1 year from the date of allotment. While, for subscription of more than Rs 5 crore, no exit load will be charged.

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

Minimum target amount: The Fund seeks to collect a minimum target amount of Rs 1 lakh under during NFO. This is the minimum amount required to operate the scheme.

Benchmark index: Benchmark Index for the scheme will be BSE SENSEX.

Fund Manager: Omprakash S. Kuckian will manage the fund.

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