Reliance Hops Onto Infra Bandwagon | Value Research Reliance MF comes up with its own version of infrastructure fund...
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Reliance Hops Onto Infra Bandwagon

The biggest mutual fund in India, Reliance, controlled by Anil Ambani, has launched its 18th equity fund on Wednesday, called the Reliance Infrastructure Fund.

With infrastructure sector having become a buzzword in the last year-or-so, as a result of the government insisting it is one of the most important sectors that it is eyeing for ramping up expenditure, while corporates have been a little slow on the offtake, they have been eyeing the opportunity to secure a piece of that pie.

While there are other older infrastructure funds in the industry, in the current scenario, where people have a penchant to invest in new fund offers, rather than in funds that already have a good performance, Reliance Mutual Fund, knowing perhaps that the advantage generally goes to the first mover in the space when the media is highlighting a sector, has got out of the blocks quickly and is looking for a generous collection from investors who believe that investments in this sector will definitely give great returns.

The scheme seeks long-term capital appreciation by investing in Indian infrastructure companies. Its ambit includes construction, metals and minerals, power and power equipments, telecom, banks, ports, and other related areas in the segment. The fund can have 35 per cent of its assets in cash and fixed income investment.

Fund Manager The designated fund manager of the scheme is Sunil Singhania, a Chartered Accountant and Chartered Financial Analyst. He has been with Reliance Capital Asset Management since 2004 and manages five varied equity funds -- Reliance Growth, Reliance Equity, Reliance Long Term Equity, Reliance Diversified Power Sector and Reliance Banking. Prior to Reliance Capital, he has worked with stock brokerages for 11 years.

Fund Family Reliance Mutual Fund has 15 equity funds with total assets of Rs 25,500 crore. This makes it the largest equity fund manager. But of these assets 37 per cent has been raised in new funds in the last 3 years. With over 88,300 crore of assets under management in April 2009, it controls a mammoth 16 per cent of the total assets of the industry. Its 15 equity funds accounting for 29 per cent of its total AUM, of which four funds are 4- or 5-star rated by Value Research.

Suitability & Recommendation Infrastructure as an investment theme holds promise with India slated to increase governmental spending in the area phenomenally to power economic growth and to generate jobs. The optimism in the theme has been rekindled when a quite stable central government was voted in recently during the general elections. However, investors have a wide array of infrastructure funds with credible performance history to choose from.

Basic Details
Type: Open-End Equity Fund
NFO Opens: May 25, 2009
NFO Closes: June 23, 2009
Minimum Application Amount:
Retail Plan: Rs. 5,000/-
Institutional Plan: Rs. 5 crore
Minimum SIP Investment: Rs. 100/- per month
Plans: Retail and Institutional Plans with Growth, Bonus and Dividend (Payout & Reinvestment) options.
Benchmark: BSE 100
Load Structure:
Entry Load: For investment below Rs. 2 crore, 2.25 per cent; for investments of Rs 2 crore or more but less than Rs 5 crore, 1.25 per cent.
Exit Load: For investments of less than Rs. 5 crore, 1 per cent if investment is redeemed within 1 year. For SIP, 1.5% if redeemed within 1 year and 1% if redeemed after 1 year but within 2 years. For STP, 1% if redeemed before 12 months.
(No entry / exit load is chargeable under Institutional Plan.)
Annual Recurring Expense (maximum): 2.50 percent (Retail Plan), 2.40 per cent (Institutional Plan). Investment management fee is 1.25 percent.

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