I invest Rs 2,000 via monthly SIP in Reliance Diversified Power Sector Fund and hold 1,100 units. Recently Reliance announced merger of Reliance Infrastructure Fund (RIF) into Reliance Diversified Power Sector Fund. How will this impact my investment?
-Alhad Tamdu
The merger of the two funds will not affect existing investors in the surviving scheme- Reliance Diversified Power Sector fund. As the Infrastructure fund will cease to exist, investors in the scheme will get units of Reliance Diversified Power Sector fund, in the ratio of the merger.
The merger will increase the assets of Reliance Diversified Power Sector fund by the assets of the Reliance Infrastructure.
Being a sectoral fund, Reliance Diversified Power Sector fund invests in power companies and those related to the sector. The fund has been struggling to perform since past few years. Sectoral funds concentrate risk to the particular sector. If this is the only fund in your portfolio you should consider investing in a diversified equity fund.
This article was originally published on August 27, 2013.
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