The primary objective of the scheme is to generate long-term capital appreciation from a portfolio that is invested predominantly in equities along with income tax benefit.
Under normal circumstances, the asset allocation under the Scheme will be as follows:
|Type of Security||% of Corpus (indicative)||Risk Profile|
|Equities||80 – 100 %||High|
|Debt and Money Market Instruments||Up to 20 %||Low to Medium|
The fund managers will follow an active investment strategy taking defensive / aggressive postures depending on opportunities available at various points of time. Subject to Regulations, the asset allocation pattern indicated above may change from time to time, keeping in view market conditions, opportunities and political & economic factors.
It must be clearly understood that the percentages stated above are only indicative and not absolute and that they can vary substantially depending upon the perception of the AMC, the intention being at all times to seek to protect the interests of the Unitholders. Such changes in the investment pattern will be for short term and defensive considerations. However, such changes at all times will comply with ELSS notifications. The asset allocation pattern will be in line with the rules and guidelines of ELSS notifications also.
Consistent with the objective of the Scheme and subject to Regulations, the corpus of the Scheme will be invested in any of the following securities.
The funds collected under a plan shall be invested in equities, cumulative convertible preference shares and fully convertible debentures and bonds of companies. Investment may also be made in partly convertible issues of debentures and bonds including those issued on rights basis subject to the condition that, as far as possible, the non-convertible portion of the debentures so acquired or subscribed, shall be disinvested within a period of twelve months.
It shall be ensured that funds of a plan shall remain invested to the extent of at least eighty per cent in securities specified in clause (a). The scheme shall strive to invest its funds in the manner stated above within a period of six months from the date of closure of the plan in every year. In exceptional circumstances, this requirement may be dispensed with by the Fund, in order that the interests of the assessee are protected.
Pending investment of funds of a plan in the required manner, the Fund may invest the funds in short-term money market instruments or other liquid instruments or both. After three years of the date of allotment of the units, the Fund may hold upto twenty per cent of net assets of the plan in short-term money market instruments and other liquid instruments to enable them to redeem investment of those unit holders who would seek to tender the units for repurchase.
- Growth Plan – Growth option
- Dividend Plan – Dividend payout Option
Minimum Investment Amount:
Minimum initial investment for all categories is Rs.500/- and in multiples of Rs.500/- thereafter. However, as per section 80 C of the Income Tax Act, 1961, the tax benefit will be available only upto a maximum amount of Rs.1,00,000/-.
Specified Redemption Period/Liquidity
The scheme will offer purchase only during the new fund offer period and the redemption/switch-out will be available only during the Specified Redemption Period i.e. first five Business Days on a monthly basis at NAV based prices after an initial lock-in-period of three years from the date of allotment.
During the New Fund Offer period:
Entry Load: Not Applicable
Exit Load: Nil*
*In accordance with the SEBI (MFs) Regulations, NFO expenses not exceeding 6% of the amount mobilised, will be charged to the scheme and will be amortised over a period of 10 years. If the investor opts for the redemption before the completion of 10 years, proportionate unamortized portion of the NFO expenses outstanding as on the date of the redemption shall be recovered from such investor.
Initial Issue Expenses: Under the SEBI Regulations, the Mutual Fund is entitled to charge New Fund Offer Expenses up to a maximum of 6% of initial resources raised under the Scheme. The New Fund Offer expenses for the Scheme would be amortised over a period of 10 years i.e. tenure of the scheme and would be included in the NAV. Any expenditure in excess of this shall be borne by the AMC. If the investor opts for the redemption before the completion of 10 years, proportionate unamortized portion of the NFO expenses outstanding as on the date of the redemption shall be recovered from such investor.
Example: Unitholder’s Investment Rs. 100
Unit face value Rs. 10, Initial Issue Expenses Rs. 6
No of years amortisation of Initial Issue Expense – 10
3650 Nos of days Amortisation of Initial Issue Expenses
NAV Day one Rs. (94+5.9984)/10 = 9.9998
* Recovery of proportionate Initial Issue Expenses
Redemption before expiry of 10 yrs but after 3 yrs of lock in period from the date of allotment will be subject to an early exit charge. An early exit charge equivalent to the unamortized Initial Issue expenses will be recovered from the investor in case of redemption before expiry of 10 yrs but after 3 yrs of lock in period from the date of allotment. This is illustrated below.
Suppose The scheme has mobilised Rs. 100 crore during the NFO period and Rs.6 cores been incurred towards Initial Issue expenses.
Rs. 6 cores will be amortised equally on a daily basis over a period of 10 yrs. If any investor opts for redemption of 10000 units after expiry of 4 yrs (i.e 48 months), unamoritsed balance of Initial Issue expenses will be recovered from the investor by way of an early exit charge. This will be calculated as follows :
|NFO Mobilisation||Rs. 100 crores|
|NFO Units Creation||10 crore (100/10)|
|NFO Expenses||Rs. 6 crore|
|Amortisation Period||120 months|
|Amortisation Per Day||(6,00,00,000/(120*30) = Rs.16,666.67|
|Amortisation Per Unit Per Day||(16,666.67/100000000) =Rs. 0.000167|
|Units redeemed after 48 months||10000|
|Unamortised NFO Expenses|
|At the end of 48 months||= 6,00,00,000- (16,666.67*1460)
|Unamortised Initial Issue Expenses|
|Per Unit At the end of 48 months||= (3,56,66,661 /10,00,00,000)
Per Unit Early Exit Charge Applicable at the end of 48 months Rs. 0.3566
Assumed NAV at the end of 48 months Rs.13.5000
Amount payable to the investors Rs.13.5 (-) 0.3566 = Rs.13.1434/-
|Investment Management Fees||1.25%|
Nomination facility: Available
Inter scheme Switch:
Switch – in from other schemes in Reliance Equity Linked Saving Fund – Series I, will be available only during NFO and at the applicable load structure from these schemes, if any.
Switch – out: Available only during the Specified Redemption Period after expiry of lock-in-period of 3 years, at the applicable load structure in the respective schemes.
Inter plan switch: Not available
SIP: Not Available
SWP: Available only during the Specified Redemption Period
STP: Available as a transferor scheme only after expiry of lock-in-period of 3 years
Sponsor: Reliance Capital Limited.
Trustee: Reliance Capital Trustee Co. Limited.
Investment Manager: Reliance Capital Asset Management Limited.
Statutory Details: The Sponsor, the Trustee and the Investment Manager are incorporated under the Companies Act 1956.
Scheme Specific Risk Factors:
Liquidity aspect of investment in the scheme: The amount invested in the scheme shall be subject to a lock-in of 3 years from the date of allotment and thereafter redemption will be available only during the Specified Redemption Period i.e. first five Business Days on a monthly basis at NAV based prices. Eligible investors in Reliance Equity Linked Saving Fund – Series I are entitled to deductions of the amount invested in units of the scheme, subject to a maximum of Rs. 100,000/- under and in terms of Section 80C (2) (xiii) of the Income Tax Act, 1961. The Scheme does not asssure or guarantee any returns. download application forms here Reliance ELSS SERIES 1