Reliance Mutual has launched its first closed-end fund: Reliance Long Term Equity Fund. The fund will automatically convert into an open-ended scheme on maturity, after three years.
The fund shall primarily focus on the small and mid cap companies. The fund defines the small and mid cap stocks as follows: any stock having market capitalisation below Rs. 250 crores as a small cap stock and any stock having market capitalisation between Rs 250 crore to Rs. 1500 crore as a mid cap stock.
The equity allocation will be 70-100 per cent while the debt allocation (including money market instruments) will be between 0-30 per cent.
During the NFO, the entry load will be nil. But if redeemed within a year, then the exit load is 4 per cent. After one year to two years, it drops to 3 per cent and to 2 per cent from after two up to three years.
Redemption will be available at half-yearly intervals only, which will be the first five business days immediately after the end of each calendar half year.
On conversion into an open-ended fund, there will be no exit load but entry load will be 2.25 per cent for subscriptions below Rs 2 crore.
Offer opens: November 14, 2006
Offer closes: December 11, 2006
Unit cost during NFO: Rs 10
Earliest closing date: November 28, 2006
Options: Dividend payout, Growth
Type of fund: Close-ended equity
Minimum application amount: Rs 5,000
Benchmark: BSE 200
Fund manager: Sunil Singhania