The largest mutual fund in India, Reliance Mutual Fund, has launched the Reliance Infrastructure Fund. The scheme launched with intention to gain long-term capital appreciation by investing in infra companies and companies related the infrastructure sector.
Its list of sectors include construction, power and power equipments, metals and minerals,ports and other related areas in the segment. The fund intends to have 35 per cent of its assets in cash and fixed income investment.
Details of the Fund:
Type: Open-End Equity Fund
NFO Opens: May 25, 2009
NFO Closes: June 23, 2009
Minimum Application Amount: Retail Plan: Rs. 5,000/-
Minimum SIP Investment: Rs. 100/- per month
Plans: Retail Plans with Growth, Bonus and Dividend (Payout & Reinvestment) options.
Benchmark: BSE 100
Load Structure:
Entry Load: 2.25 per cent;
Exit Load: 1 per cent if investment is redeemed within 1 year.
Should an investor invest or not ?
Yes, but not now. Though the infra story is here to stay, investors could wait and buy later, when the fund is available on an ongoing basis. Investors can use the SIP method for investing in this fund, on declines.
Though it is a good fund to invest, infra stocks have gone up 100/200 %
A good review of the Fund.
I just ask myself if metals and minerals are a part of infrastructure?!?
That's what the Reliance MF's brochure says. You would be surprised , they have included banking as well, probably they are the lenders to the infra companies. They want to sell the product somehow !
There is a probability of NAV going down to 30 to 40 % in the initial stages. Better to grab the units at that time as in the long run this fund is sure to perform.
one of the worst fund, the buying rate was 10.25 when sensex was 14000 and now 8.92 even though the sensex is around 18000.
I don't know how they are manipulating
The infra stocks have taken quite a beating. We had recommended a wait and buy approach, in the review above.
Also it is better go for a diversified equity fund than a sectoral fund.