Asset Allocation- An Indispensable Principle of Investing

8/8/2019 Asset Allocation- An Indispensable Principle of Investing

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Reliance Mutual Fund OffersReliance Mutual Fund Offers EmbeddedEmbedded Financial Planning SolutionsFinancial Planning Solutions

Investments have come a long way today from traditional investments in precious metals and

stones to savings accounts, fixed deposits, stocks and Mutual Funds.

Mutual Funds are an important part of the entire financial systemand are seen as

suitable investment for the common man as they offer an opportunity to invest in a

diversified, professionally managed basket of securities at a relatively low cost.

Advantages of Mutual Funds

Professional Management

Diversification of risks

Opportunity to earn market related returns

Ease of liquidity

Transparency

Affordability: Investors individually may lack sufficient funds to invest in high-gradestocks. A mutual fund because of its large corpus allows even a small investor to take the

benefit of its investment strategy.

Wider choice of options depending upon the investment objective, risk profile and

investment period

Regulated by SEBI

The mutual fund industry has also evolved over a period of time. Just the way the industry

has witnessed increase in the no of players, in the same way, it has seen a continuous

launch of a variety of mutual fundswhich in turn have created lot many categories such

as balanced funds, index funds, short term bond funds, theme based funds & others. As a

result this has left the investors in a state of confusion.

Therefore in this fast moving competitive world, appropriate planning(through an ideal

asset allocation mix) becomes even more significant than actual investingitself.

Hence it is aptly said;

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Moreover today investors are perplexed over the ideal investment portfolio. Therefore,

the best way to look at this would be to integrate the basic principles of investing while

devising an appropriate investment strategy considering his objectives & risk return

profile.

5 Golden Rules of Investing led us to the basic principles of investing

Recognize your life stage and unique financial requirement

Understand your Risk-taking ability

Look for investments that give you positive real returns

Decide on your Investment horizon

Plan savings and investment to achieve these goals

This can be done with the help of a process known as

Financial Planning

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An investor without an investment objective is like a traveler

without a destination

- Ralph Seger

Financial Planning is a continues process that involves planning and control over

your personal financial practices focusing on your financial goals in

synchronization with your risk profile


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Objective oriented investing

All your investments decisions

should be in line with your

short term & long term

financial goals & objectives

This leads us to the basic investment principles which you must ensure while taking investment

decisions;

Asset Allocation

It is about having a strategic mix of various asset classes. It is

important to follow suitable asset allocation model according to your

risk appetite and return expectations

Portfolio Review & Rebalancing

Regular Review & re- alignment of the investment portfolio is critical to achieve financial goals

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Benefits of Financial Planning & Asset Allocation

Role of Financial Advisor: People enlist the help of a financial planner because of thefollowing expertise they have;

Providing in depth knowledge and understanding of the financial products

Providing direction and meaning to financial decisions;

Allowing the person to understand how each financial decision affects the other areas offinance; and

Allowing the person to adapt more easily to life changes in order to feel more secure

Before proceeding with asset allocation model, one has to understand his risk return profile

which is highly influenced by the following parameters;

Age of the Investor

Investment Horizon

Financial Goal (long term & short term)

Cash Flow

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Cash flow & incomemanagement

Inculcate Savings

Habit & enables

long term

investment

Portfolio

Diversification

Family Security


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Family Dependents

Level of Acceptance of loss

Accordingly the risk return profile of the investors will be categorized into

Aggressive Investor, Moderate Investor and Conservative Investor

Thus, keeping in mind the risk return profile and the vast choice of investment arena it is

advisable to have an asset allocation strategy for various asset classes based on age. Thus,

for an investor between the age of 45 60 years, his investment decisions would be

relatively risk - averse as compared to a young investor between the age of 20 35 years.

Hence, in order to map the proposed allocation of funds in different asset classes

with the investors risk profile, an asset allocation model has been formulated for

all type of investors.

The below mentioned model is based on age investment principle, which

recommends that the portion of relatively less risky asset class of an investors portfolio

should be equal to his age and the balance should be invested in relatively more risky asset

class. For example, a 30 year old investor should invest 30% in relatively less risky asset

class and 70% in relatively more risky asset class.

Asset Allocation Conservative (%) Moderate (%) Aggressive (%)

Equity Asset Class 30 55 70

Fixed Income Asset Class 70 45 30

Total 100 100 100

The above mentioned asset allocation model has been derived using established theories

on risk and return. The asset allocation model is purely indicative and notional. Readers

are advised to seek appropriate independent professional advice and arrive at an

informed investment decision before making any investments.

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Accordingly the asset classes can be further categorized as follows;

Money Market Funds (MMF- Liquid Funds)

These funds provide easy liquidity and preservation of capital. These schemes invest in

short-term instruments like Treasury Bills, inter-bank call money market, CPs and CDs

with the average maturity not exceeding more than 3 months. These funds are meant for

short-term cash management of corporate houses and are meant for an investment

horizon of 1day to 1 month. These schemes rank low on risk-return matrix and are

considered to be the safest amongst all categories of mutual funds

Ultra Short Term Funds (UST)

The ultra short term category funds are also suitable for cash management and easy

liquidity needs with the endeavor of giving returns higher than the Liquid category. The

major difference between the liquid and ultra short term fund categories is based on the

tenure of maturity of papers held in the portfolio & the mark to market component of the

securities held.

Short Term Funds (ST)

It is meant for investment horizon for six months to 1 year. These funds primarily invest

in short term papers like Certificate of Deposits (CDs) and Commercial Papers (CPs).

Some portion of the corpus is also invested in corporate debentures.

Long Term Funds (LTF)

Long duration schemes include Income Funds and Gilt Funds.

Income Fund aim to provide regular and steady income to investors. These schemes

generally invest in fixed income securities such as bonds and corporate debentures.

Capital appreciation in such schemes may be limited.

Gilt Fund Invest their corpus in securities issued by Government, popularly known as

Government of India debt papers. These Funds carry zero Default risk but are

associated with Interest Rate risk. These schemes are safer as they invest in papers

backed by Government. Monthly Income Plans (MIP)

This type of funds invests maximum of their total corpus in debt instruments while they

take minimum exposure in equities. It gets benefit of both equity and debt market. These

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scheme ranks slightly high on the risk-return matrix when compared with other debt

schemes.

Balanced Funds (Balanced)

Balanced Schemes aim to provide both growth and income by periodically distributing a

part of the income and capital gains they earn. These schemes invest in both shares and

fixed income securities

Equity Diversified Funds (Eq Div)

Growth Schemes are also known as equity schemes which are further sub categorized as

Largecap, Midcap and Multicap funds. The aim of these schemes is to provide capital

appreciation over medium to long term. These schemes normally invest a major part of

their fund in equities and are willing to bear short-term decline in value for possible future

appreciation.

Diversified Large Cap Funds : Pre dominantly invests in constituents of broad

market indices like BSE Sensex/ S&P Nifty/BSE 100.

Diversified Mid Cap Fund Pre dominantly invests in constituents of indices like

BSE Mid Cap/ CNX MidCap/ BSE 200.

Diversified Multi Cap Funds: Pre dominantly invests in companies across all

market cap & sectors.

Sector Funds (Sector)

These are the funds/schemes which invest in the securities of only those sectors or

industries as specified in the scheme information documents. e.g. Pharmaceuticals,

Software, Fast Moving Consumer Goods (FMCG), Petroleum stocks, etc. The returns in

these funds are dependent on the performance of the respective sectors/industries. While

these funds may give higher returns, they are more risky compared to diversified funds.

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For a better understanding of the same, it is imperative to position different asset

classes, basis Risk, Return & Investment Horizon, as shown below in the graph.

High

*Investment Profile of the respective category **Risk profile of the category

How to read the above graph?

For example, proposed investment horizon for MIP category is 1 2 years with moderate

investment risk profile of the scheme having comparatively higher risk -return than duration

debt funds and money market funds

Taking a step further, the asset allocation strategy can even be applied within

different categories of equity and debt respectively, so as to map the proposed

allocation of funds in different categories with the investors risk profile.

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Proposed Allocation of Funds Within Equity & Fixed Income Asset

Class

AssetClass

Categories / Risk Profile Conservative (%) Moderate (%) Aggressive (%)

Equity

Diversified Large Cap 14% 19% 20%

Balanced 5% 6% 4%

Diversified Multi Cap 5% 10% 15%

Diversified Mid Cap 3% 7% 11%

Diversified Theme Based 2% 6% 8%

Sector 3% 8% 13%

Fixed Income

Liquid 28% 9% 3%

Ultra Short Term 21% 11% 3%

Short Term 7% 7% 5%

Long Term Debt 11% 11% 12%

MIP 4% 7% 8%

Total 100.00% 100.00% 100.00%

Enclosed HyperlinkEnclosed Hyperlink

Annexure 1 for KFD of RMF Equity & Fixed Income Schemes.Annexure 1 for KFD of RMF Equity & Fixed Income Schemes.

Annexure 2 for Plan A & B of Proposed Asset Allocation of RMF Schemes.Annexure 2 for Plan A & B of Proposed Asset Allocation of RMF Schemes.

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Key Feature Document (KFD) of RMF Equity & Fixed Income Schemes
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DisclaimersDisclaimers

The views mentioned herein constitute only the opinions and do not constitute any guidelines

or recommendation on any course of action to be followed by the readers. This information is

meant for general reading purpose only and is not meant to serve as a professional guide for

the readers. This document has been prepared on the basis of publicly available information,

internally developed data and other sources believed to be reliable. The Sponsor, The

Investment Manager, The Trustee or any of their respective directors, employees, affiliates or

representatives do not assume any responsibility for, or warrant the accuracy, completeness,

adequacy and reliability of such information. Whilst no action has been solicited based upon

the information provided herein, due care has been taken to ensure that the facts are accurate

and opinions given fair and reasonable. This information is not intended to be an offer or

solicitation for the purchase or sale of any financial product or instrument. Recipients of this

information should rely on information/data arising out of their own investigations. Readers

are advised to seek independent professional advice and arrive at an informed investmentdecision before making any investments. None of The Sponsor, The Investment Manager, The

Trustee, their respective directors, employees, affiliates or representatives shall be liable for

any direct, indirect, special, incidental, consequential, punitive or exemplary damages,

including lost profits arising in any way from the information contained in this material. The

Sponsor, The Investment Manager, The Trustee, any of their respective directors, employees

including the fund managers, affiliates, representatives including persons involved in the

preparation or issuance of this material may from time to time, have long or short positions

in, and buy or sell the securities thereof, of company(ies) / specific economic sectors

mentioned herein

Reliance Growth Fund (An Open-ended Equity Growth Scheme): The primary

investment objective of the scheme is to achieve long term growth of capital by investing in

equity and equity related securities through a research based investment approach. Asset

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Allocation: Equity and Equity related Instruments: 100 to 65%, Debt Instruments & Money

Market Instruments: 35 to 0%.

Reliance Vision Fund (An Open-ended Equity Growth Scheme): The primary investment

objective of the scheme is to achieve long-term growth of capital by investment in equity and

equity related securities through a research based investment approach. Asset Allocation:

Equity and Equity related Instruments: 100 to 60%, Debt Instruments: 30 to 0%, Money


Reliance Equity Opportunities Fund (An Open-ended Diversified Equity Scheme): The

primary investment objective of the scheme is to seek to generate capital appreciation &

provide long-term growth opportunities by investing in a portfolio constituted of equity

securities & equity related securities and the secondary objective is to generate consistent

returns by investing in debt and money market securities. Asset Allocation: Equity and

Equity related Instruments: 100 to 75%, Debt Instruments & Money Market securities

(including investments in securitised debt): 25 to 0%.

Reliance Equity Advantage Fund (An Open ended Diversified Equity Scheme): The

primary investment objective of the scheme is to seek to generate capital appreciation &

provide long-term growth opportunities by investing in a portfolio predominately of equity &

equity related instruments with investments generally in S & P CNX Nifty stocks and the

secondary objective is to generate consistent returns by investing in debt and money market

securities. Asset Allocation: Equity and Equity related Instruments: 100 to 70%, Debt

Instruments & Money Market Instruments (including investments in securitised debt*): 30 to

0%.

Reliance Quant Plus Fund (An Open-ended Equity Scheme): The investment objective of

the Scheme is to generate capital appreciation through investment in equity and equity

related instruments. The Scheme will seek to generate capital appreciation by investing in an

active portfolio of stocks selected from S & P CNX Nifty on the basis of a mathematical model.

Asset Allocation: Equity and Equity related Instruments: 100 to 90%, Debt & Money Market

Instruments: 10 to 0%.

Reliance Equity Fund (An open-ended Diversified Equity Scheme): The primary

investment objective of the scheme is to seek to generate capital appreciation & provide long-

term growth opportunities by investing in a portfolio constituted of equity & equity related

securities of top 100 companies by market capitalization & of companies which are available in

the derivatives segment from time to time and the secondary objective is to generate

consistent returns by investing in debt and money market securities. Asset Allocation:

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Equity and Equity related Instruments: 100 to 75%, Debt Instruments & Money Market

Instruments (including investments in securitised debt): 25 to 0%.

Reliance NRI Equity Fund (An Open-ended Diversified Equity Scheme): The primary

investment objective of the scheme is to generate optimal returns by investing in equity and

equity related instruments primarily drawn from the Companies in the BSE 200 Index. Asset

Allocation: Equity and Equity related Instruments: 100 to 65%, Debt Instruments & Money


Reliance Infrastructure Fund (An open ended Equity Scheme): The primary investment

objective of the scheme is to generate long term capital appreciation by investing

predominantly in equity and equity related instruments of companies engaged in

infrastructure and infrastructure related sectors and which are incorporated or have their area

of primary activity, in India and the secondary objective is to generate consistent returns by

investing in debt and money market securities. Asset Allocation: Equities and equity related

securities including derivatives: 100 to 65%, Debt and Money market securities (including

investments in securitised debt): 35 to 0%.

Reliance Natural Resources Fund (An Open Ended Equity Scheme): The primary

investment objective of the scheme is to seek to generate capital appreciation & provide long-

term growth opportunities by investing in companies principally engaged in the discovery,

development, production, or distribution of natural resources and the secondary objective is to

generate consistent returns by investing in debt and money market securities. Asset

Allocation: Equity and Equity related Securities of companies principally engaged in the

discovery, development, production, or distribution of natural resources in: 100 to 65%,

Domestic Companies: 100 to 65%, Foreign securities as permitted by SEBI/RBI from time to

time: 35 to 0%, Debt and Money market securities (including investments in securitised

debt): 35 to 0%.

Reliance Regular Savings Fund (An open ended Scheme) Equity Option: The primary

investment objective of this Option is to seek capital appreciation and/or to generate

consistent returns by actively investing in equity / equity related securities. Asset Allocation:

Equity & Equity Related Securities: 100 to 80%, Debt and Money Market Instruments with an

average maturity of 5-10 years: 20 to 0%.

Reliance Regular Savings Fund (An open ended Scheme) Balanced Option: The

primary investment objective of this Option is to generate consistent return and appreciation

of capital by investing in mix of securities comprising of Equity, Equity related Instruments &

Fixed income instruments. Asset Allocation: Equity & Equity Related Securities: 75 to 50%,

Debt and Money Market Instruments: 50 to 25%.

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Reliance Banking Fund (An Open-ended Banking Sector Scheme): The primary

investment objective of the scheme is to generate continuous returns by actively investing in

equity and equity related or fixed income securities of Banks. Equity and Equity related

Instruments: 100 to 0%, Debt Instruments & Money Market Instruments: 100 to 0%.

Reliance Diversified Power Sector Fund (An Open-ended Power Sector Scheme): The

primary investment objective of the scheme is to seek to generate continuous returns by

actively investing in equity and equity related or fixed income securities of Power and other

associated companies. Asset Allocation: Equity and Equity related Instruments: 100 to 0%,

Debt Instruments & Money Market Instruments: 100 to 0%.

Reliance Pharma Fund (An Open-ended Pharma Sector Scheme): The primary

investment objective of the scheme is to seek to generate consistent returns by investing in

equity and equity related securities or fixed income securities of Pharma and other associated

companies. Asset Allocation: Equity and Equity related Instruments: 100 to 0%, Debt

Instruments & Money Market Instruments with an average maturity of 5-10 years: 100 to 0%,

Reliance Media & Entertainment Fund (An Open-ended Media & Entertainment

Sector Scheme): The primary investment objective of the scheme is to generate continuous

returns by investing in equity and equity related or fixed income securities of Media &

Entertainment and other associated companies. Asset Allocation: Equity and Equity related

Instruments: 100 to 0%, Debt and Money Market Instruments with an average maturity of 5 -

10 years.

Reliance Tax Saver (ELSS) Fund (An Open-ended Equity Linked Savings Scheme):

The primary objective of the scheme is to generate long-term capital appreciation from a

portfolio that is invested predominantly in equity and equity related instruments. Asset

Allocation: Equity and equity related securities: 100 to 80%, Debt and Money Market


Reliance Long Term Equity Fund (An open ended diversified equity scheme) The

primary investment objective of the scheme is to seek to generate long term capital

appreciation & provide long-term growth opportunities by investing in a portfolio constituted of

equity & equity related securities and Derivatives and the secondary objective is to generate

consistent returns by investing in debt and money market securities. Asset Allocation:

Equity and Equity related Securities: 100 to 70%, Debt Instruments & Money Market


Load Structure to Entry Load for all the schemes to Nil. In accordance with the

requirements specified by the SEBI circular no. SEBI/IMD/CIR No.4/168230/09 dated June 30,

2009 no entry load will be charged for purchase / additional purchase / switch-in accepted by

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RMF with effect from August 01, 2009. The upfront commission on investment made by the

investor, if any, will be paid to the ARN Holder (AMFI registered Distributor) directly by the

investor, based on the investors assessment of various factors including service rendered by

the ARN Holder.Exit Load (except for Reliance Tax Saver (ELSS) Fund and Reliance Quant

Plus Fund) to 1%, if redeemed or switched out on or before completion of 1 year from the

date of allotment of units, Nil thereafter, Reliance Tax Saver (ELSS) Fund to Nil, Reliance

Quant Plus Fund - 1%, if redeemed or switched out on or before completion of 15 days from

the date of allotment of units, Nil thereafter.

Reliance Floating Rate Fund - Short Term Plan (An open ended Income Scheme): The primary objective of the scheme isto generate regular income through investment in a portfolio comprising substantially of Floating Rate Debt Securities(including floating rate securitized debt, Money Market Instruments and Fixed Rate Debt Instruments swapped for floating ratereturns). The scheme shall also invest in Fixed rate Debt Securities (including fixed rate Securitized Debt, Money MarketInstruments and Floating Rate Debt Instruments swapped for fixed returns). Asset Allocation: Money market instruments and

Floating Rate Debt Securities (including floating rate securitised debt & Fixed Rate Debt Instruments swapped for floating ratereturns) with tenure exceeding 3 months upto a maturity of 3 years 100 to 25%, Fixed Rate Debt Securities (includingsecuritized debt, Money Market Instruments & Floating Rate Debt Instruments swapped for fixed rate returns) 75 to 0%.Loads: Entry Load Nil, Exit Load - 0.25%, if the units are redeemed within 3 months from the date of allotment, Nil thereafter

Reliance Gilt Securities Fund (An Open ended Government Securities Scheme): The primary investment objective of the

Scheme is to generate optimal credit risk-free returns by investing in a portfolio of securities issued and guaranteed by the

Central Government and State Government. Asset Allocation: Gilt 100 to 70%, Money Market Instruments 30 to 0%.

Loads: Entry Load Nil, Exit Load - Nil

Reliance Income Fund (An open ended Income Scheme):The primary investment objective of the scheme is to generate

optimal returns consistent with moderate levels of risk. This income may be complemented by capital appreciation of the

portfolio. Accordingly, investments shall predominantly be made in Debt & Money Market Instruments. Asset Allocation: Debt

Instruments - 100 to 50%, Money Market Instruments - 50 to 0%. Loads: Entry Load Nil, Exit Load - 1%, if redeemed or

switched out on or before completion of 30 days from the date of allotment of units, Nil thereafter.

Reliance Liquid Fund (An Open ended Liquid Scheme): The investment objective of the Scheme is to generate optimal

returns consistent with moderate levels of risk and high liquidity. Accordingly, investments shall predominantly be made in Debt

and Money Market Instruments. Asset Allocation (i) Treasury Plan - Call Money/ Cash / Repo and Reverse Repo - 50 0%,

Money Market Instruments (Mibor linked instruments, CPs, T-Bills, CDs and/or other Short Term papers) - 95 to 0% (ii) Cash

Plan - Reverse Repo & CBLO - 100 to 0%, Mibor linked instruments with daily put/call option and Overnight Interest rate reset

linked Debt Instruments - 100 to 0%. Loads Entry Load Nil, Exit Load - Nil

Reliance Liquidity Fund (An Open ended Liquid Scheme): The investment objective of the Scheme is to generate optimal

returns consistent with moderate levels of risk and high liquidity. Accordingly, investments shall predominantly be made in Debt

and Money Market Instruments. Asset Allocation: Repo and Reverse Repo - 35 to 0%, Money Market Instruments (Mibor

linked instruments, CPs, T-Bills, CDs) and/or other Short Term debt instruments (Floating Rate Notes, Short Tenor NCDs,PTCs) and /or Less than 1 year maturity GSecs - 100 to 65%. Loads Entry Load Nil, Exit Load - Nil

Reliance Medium Term Fund (An Open ended Income Scheme with no assured returns): The primary investment

objective of the scheme is to generate regular income in order to make regular dividend payments to unitholders and the

secondary objective is growth of capital. Asset Allocation: Money Market Instruments /Short Term debt Instruments/Floating

Rate Notes with maturity/interest rate reset period not exceeding 3 months - 80 to 0%, Money Market Instruments (CPs, T-

Bills, CDs) and/or other Short Term debt instruments (Floating Rate Notes, Short Tenor NCDs, Securitized debt*) and any

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other instrument with duration of more than 3 months but not exceeding 3 years - 100 to 20%. Loads Entry Load Nil, Exit

Load - Nil

Reliance Money Manager Fund (An open ended Income Scheme): The investment objective of the Scheme is to generate

optimal returns consistent with moderate levels of risk and liquidity by investing in debt securities and money market securities.

Asset Allocation: Debt* Instruments including Government Securities, Corporate Debt, Other debt instruments and Money

Market Instruments with average maturity less than equal to 12 months - 100 to 0%, Debt* Instruments including Government

Securities, Corporate Debt and other debt Instruments with average maturity greater than 12 months - 50 to 0%. * Securitiseddebt upto 60% of the corpus. Loads Entry Load Nil, Exit Load - Nil

Reliance Monthly Income Plan (An Open Ended Fund. Monthly Income is not assured & is subject to the availability of

distributable surplus): The primary investment objective of the Scheme is to generate regular income in order to make

regular dividend payments to unit holders and the secondary objective is growth of capital. Asset Allocation: Equities and

Equity related Securities - 20 to 0%, Fixed Income Securities (Debt and Money Market) - 100 to 80%. Loads: Entry Load Nil,

Exit Load - 1%, if redeemed or switched out on or before completion of 1 year from the date of allotment of units, Nil thereafter.

Reliance Dynamic Bond Fund (An open ended Income Scheme): The primary investment objective of the scheme is to

generate optimal returns consistent with moderate levels of risks. This income may be complimented by capital appreciation of

the portfolio. Accordingly, investments shall predominantly be made in debt and money market instruments. Asset Allocation:

Debt Instruments - 100 to 0%. Loads: Entry Load Nil, Exit Load - 1%, if redeemed or switched out on or before completion of

6 months from the date of allotment of units, Nil thereafter.

Reliance Regular Savings Fund (An open ended Scheme) Debt Option: The primary investment objective of this Option

is to generate optimal returns consistent with moderate level of risk. This income may be complemented by capital appreciation

of the portfolio. Accordingly investments shall predominantly be made in Debt and Money Market Instruments. Asset

Allocation:Debt instruments (including securitised debt) with maturity of more than 1 year - 100 to 65%, Money Market

instruments (including cash/call money & Reverse Repo) and debentures with maturity of less than 1 year - 35 to 0%. Loads:

Entry Load Nil, Exit Load - 1%, if redeemed or switched out on or before completion of 1 year from the date of allotment of

units, Nil thereafter.

Reliance Short Term Fund (An Open ended Income Scheme): The primary investment objective of the scheme is to

generate stable returns for investors with a short term investment horizon by investing in fixed income securities of short term

maturity. Asset Allocation: Debt and Money Market Instruments with average maturity upto a year - 100 to 60%, Debt

Instruments with average maturity greater than a year and normally upto 7 years depending upon availability - 60 to

40%.Loads: Entry Load Nil, Exit Load - Nil

Terms of Issue - The NAV of the Scheme will be calculated and declared on every Working Day. The scheme provides sale /

switch in & repurchase /switch - out facility on all Business Days at NAV based prices.

Terms of issue: The NAV of all the Schemes will be calculated and declared on every Working

Day. The scheme provides sale / switch in & repurchase /switch - out facility on all Business

Days at NAV based prices except for Reliance Tax Saver (ELSS) Fund were scheme will

provides sale / switch in & repurchase /switch - out facility (subject to lock in period of 3

years) on all Business Days at NAV based prices.

Statutory Details: Reliance Mutual Fund has been constituted as a trust in accordance with

the provisions of the Indian Trusts Act, 1882. Sponsor: Reliance Capital Limited. Trustee:

Reliance Capital Trustee Company Limited. Investment Manager: Reliance Capital Asset

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Management Limited (Registered Office of Trustee & Investment Manager: Reliance House

Nr. Mardia Plaza, Off. C.G. Road, Ahmedabad 380 006). The Sponsor, the Trustee and the

Investment Manager are incorporated under the Companies Act 1956. The Sponsor is not

responsible or liable for any loss resulting from the operation of the Scheme beyond their

initial contribution of Rs.1 lakh towards the setting up of the Mutual Fund and such other

accretions and additions to the corpus.

Risk Factors: Mutual Funds and securities investments are subject to market risks

and there is no assurance or guarantee that the objectives of the Scheme will be

achieved. As with any investment in securities, the NAV of the Units issued under

the Scheme can go up or down depending on the factors and forces affecting the

capital markets. Past performance of the Sponsor/AMC/Mutual Fund is not indicative of the

future performance of the Scheme. Reliance Growth Fund, Reliance Vision Fund,

Reliance Equity Opportunities Fund, Reliance Banking Fund, Reliance Diversified

Power Sector Fund, Reliance Equity Advantage Fund, Reliance Pharma Fund,

Reliance Regular Savings Fund, Reliance NRI Equity Fund, Reliance Tax Saver (ELSS)

Fund, Reliance Equity Fund, Reliance Quant Plus Fund, Reliance Natural Resources

Fund, Reliance Media & Entertainment Fund and Reliance Infrastructure Fund are

the names of the Schemes and does not in any manner indicate either the quality of

the Scheme; its future prospects or returns. The NAV of the Scheme may be affected,

interalia, by changes in the market conditions, interest rates, trading volumes, settlement

periods and transfer procedures. The Mutual Fund is not assuring that it will make periodical

dividend distributions, though it has every intention of doing so. All dividend distributions are

subject to the availability of distributable surplus in the Scheme. For details of scheme

features apart from those mentioned above and for scheme specific risk factors, please refer

to the Scheme Information Document. Please read the Scheme Information Document

and Statement of Additional Information carefully before investing.

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17

Documents

Asset Allocation- An Indispensable Principle of Investing