NFO Period from 14 February to 28 February 2011
Reliance Mutual Fund has launched a new fund named as Reliance Gold
Savings Fund, an open ended fund of fund scheme. The New Fund Offer
(NFO) price for the scheme is Rs 10 per unit. The new issue will be open
for subscription from 14 February and close on 28 February 2011.
Reliance Gold Savings Fund, is the first gold fund of fund in the
industry which opens a new avenue for investing in gold as an asset
class. The fund seeks to provide returns of gold through investments in
Reliance Gold Exchange Traded Fund, which in turn invest in physical
gold. It enables you to reap the returns of gold in a paper form without
the need of a demat account.
It is a passively managed fund which would enable an investor to save
for gold in a convenient manner either through lump sum investment or
through systematic investment. It aims to give investors the opportunity
to participate in the bullion market in a relatively cost effective and
convenient way as you can directly purchase and sell the units at the
AMC.
The scheme would allocate 95% to 100% of assets in Reliance Gold
Exchange Traded Fund with medium to high risk profile. On the flip side
it would allocate upto 5% of assets in reverse repo and /or CBLO and/or
short-term fixed deposits and/or schemes which invest predominantly in
the money market securities or liquid schemes with low to medium risk
profile.
Reliance Capital Asset Management CEO Sundeep Sikka said: "We expect
this gold investment industry to surpass equity MFs in the next three
years."
Sikka said the gold investment opportunity in India was not optimally
tapped and the new product will offer a simple, affordable and
investor-friendly solution for investing in gold to the masses.
"Indians are known for their love for gold. However, with low demat
penetration in India, a lot of investors have not been able to
participate in this safe mode of investment.
"This product will create a new avenue for pure gold investments for the
retail investor without the need of having a demat account or a
locker," he added.
This new fund will enable investors to avail long-term taxation benefits
from the first year itself, unlike physical gold, wherein long-term
taxation can only be availed after three years.
The scheme offer growth and dividend plan. The dividend plan offers dividend payout and reinvestment option.
The minimum application amount is Rs 5,000 and in multiples of Rs 1 thereafter.
The fund seeks to collect a minimum subscription amount of Rs 1 crore under the scheme during the NFO period.
Entry load charge for the scheme will be nil. The exit load charge will
be 2% if redeemed or switched out on or before completion of 1 year from
the date of allotment of units, Nil - If redeemed or switched out after
the completion of 1 year from the date of allotment of units.
The scheme's performance will be benchmarked against the price of physical gold.
The fund manager for the scheme will be Hiren Chandaria.