Reliance ETF Nifty BeES

Performance

A branch of the Reliance Anil Dhirubhai Ambani group, Reliance Mutual Fund, is a well-known mutual fund with Rs.2.40 crore worth assets under management. The company has its presence in 160 locations pan-India. Reliance Mutual Fund was established in the year 1995 with the vision to be recognised as a wealth creator globally, with the focus on good corporate governance and customer care.

The company offers various schemes under equity funds, debt funds, Exchange Traded Funds (ETF), liquid funds, retirement funds and liquid funds. Reliance ETF Nifty BeES is one among the 15 ETFs offered by the company. The fund tracks the Nifty 50 Index and invests in debt instruments, money market instruments, and derivative instruments in addition to equity and equity related instruments.

Investment Objective of Reliance ETF Nifty BeES

The objective of the scheme is to offer returns that are equivalent to the returns of the securities as indicated by the Nifty 50 Index.

Key Features of Reliance ETF Nifty BeES

The main features of the Reliance ETF Nifty BeES scheme are:

Investment Amount for Reliance ETF Nifty BeES

The investment amount limitations set by the company are as mentioned below:

Asset Allocation for Reliance ETF Nifty BeES

The investment range of the scheme, under stable market conditions, would be as given below:

Who can Invest in Reliance ETF Nifty BeES?

The entities that are eligible to subscribe to this scheme are:

• Resident individuals - single or joint
• Parents or guardians on behalf of minors
• Hindu undivided family
• Non-resident Indians (NRIs)
• Mutual funds
• Corporate bodies, companies, partnership firms, associations of people, Public Sector Undertakings (PSUs), provided they are permitted to invest as per the law and regulations
• Investment banks, financial institutions, and banks established in India; as well as such institutions established outside India but with branches in India
• Multilateral funding agencies incorporated outside India
• Foreign Institutional Investors (FII), Qualified Foreign Investors (QFI), Foreign Portfolio Investment (FPI)
• International financial organisations that have made an arrangement to make investments in India
• Charitable trusts, religious trusts, private trusts authorised to make investments
• Navy, army, air-force and such eligible institutions
• Research organisations - scientific and industrial
• Retirement and employee benefit funds such as gratuity, pension, superannuation, provident, etc.
• Insurance companies
• Other bodies, associations or institutions permitted to make investments
• All categories of investors permitted to invest at present and in the future

NAV Disclosure and Benchmark for Reliance ETF Nifty BeES

NAV: To calculate the Net Asset Value (NAV) of the units of a scheme, the market value of the investments made under the scheme and the current assets are added, after which the current liabilities and expenses are deducted. The resulting figure is then divided by the number of units under the scheme as on the date when the NAV was calculated. The final result is the NAV of the scheme. The NAV is calculated at the end of every business day. The value will be mentioned on the official website of the AMC and published in at least two widely-subscribed newspapers.

Liquidity: Units under the scheme can be purchased or sold on the National Stock Exchange of India Ltd. like any other stock. Also, authorised unitholders and large investors can choose to buy or sell units with the mutual fund as creation units.

Benchmark index: The benchmark index of the scheme is Nifty 50 Index. The performance of the scheme is compared based on the benchmark index.

Fund Manager for Reliance ETF Nifty BeES

The Fund Manager of the scheme is Payal Wadhwa Kaipunjal who has experience in the financial services sector dating back to June 2004. She is a Senior Fund Manager at Reliance Nippon Life Asset Management Ltd. and has been managing the Reliance ETF Nifty BeES scheme from May 2014.

Investment Restrictions of Reliance ETF Nifty BeES

Certain limitations are applicable on the scheme as given below:

• The scheme can invest a maximum of 10% of its NAV in debt instruments that include money market and non-money market instruments. The limit can be extended to 12% with approval from the trustee and the AMC. The limit, however, is not applicable to collateralised borrowing, treasury bills, government securities, and lending obligations.
• The scheme can invest a maximum of 10% of its NAV in unrated debt securities. The total investment for such securities cannot be more than 25%.
• Investments can be transferred from one scheme to another, provided the transfer is done at the market price of that time and the investment objective of the new scheme is similar to the previous scheme.
• No term loans can be availed against the scheme.
• The scheme can choose to make investments in another scheme or another mutual fund and not be levied with charges for such investments, provided the aggregate investment made under the same AMC or different AMC does not cross 5% of NAV of the scheme.
• The fund buys and sells securities based on the deliveries.
• For long-term investments, the securities will be purchased by the fund in the name of the fund, on account of the scheme.
• The fund is allowed to make short-term investments in certain scheduled commercial banks.
• The fund, in order to achieve liquidity for repurchase, redemption, interest payment, or dividend payment, can borrow up to 20% of the NAV of the scheme. The duration cannot be more than 6 months and the borrowing is done only through authorised institutions.
• The scheme cannot make investments in unlisted securities, listed securities that are more than 25% of the net assets, or securities issued by private offering.
• The maximum investment limit for unlisted equity and equity-related shares is 5%.
• No investment can be made in fund of funds scheme.
• Since Reliance ETF Nifty BeES is an index scheme, it will not make investments in securitised debt.
• The assets under the scheme cannot be more than 10% of the company’s paid-up capital.
• The scheme can lend securities as per the regulations put down by SEBI.
• The illiquid securities of the scheme cannot be more than 15% of the total assets of the scheme.
• If the aggregate of securities under the scheme is Rs.10 crore or more, the transactions will be carried out only in the dematerialised form. Also, transactions with respect to government securities will be in the dematerialised form.
• The scheme will function in accordance with any new regulation implemented by SEBI.

Dividend Policy of Reliance ETF Nifty BeES

The trustee of the scheme will provide dividends to the unitholders depending on whether a surplus of assets is available or not. The dividend amount and the frequency at which the dividend amount is distributed depends on the decision taken by the trustee. The dividend is paid to the unitholder after deducting the applicable taxes at source. The dividend is typically distributed within 30 days from the date of declaration of the dividend. The fund gives no guarantee whatsoever about the amount or the frequency at which the dividends will be paid. Once the dividend is paid, the NAV of the scheme will be reduced by the dividend amount and the dividend distribution tax that is paid.

Distribution of dividend

Dividends can be distributed to the unitholders in the following ways:

• Cheque
• Real Time Gross Settlement (RTGS)
• Electronic Clearing System (ECS)

The amount is transferred to the unit holder’s account through any of the above-mentioned modes of payment or any other mode that the AMC may add in the future.

Why you should invest in Reliance ETF Nifty BeES

Backed by a strong organisation such as Reliance Anil Dhirubhai Ambani Group, Reliance Mutual Fund is one of the fastest growing mutual funds in the country. The company has been seeing a steady increase ever since its establishment. The fund manager, Payal Wadhwa Kaipunjal, manages several index plans and has vast experience in the sector. Individuals who are looking to invest and achieve capital appreciation can opt for this scheme.

GST rate of 18% applicable for all financial services effective July 1, 2017.