- R*Shares Long Term Gilt ETF (an open ended Index Linked Exchange - - PowerPoint PPT Presentation
Reliance Mutual Fund - R*Shares Long Term Gilt ETF (an open ended Index Linked Exchange Traded Fund) NFO Opens : 27-June-2016 NFO Closes : 01-July-2016 Offer for Sale of Units at Rs.10/- (On allotment, the value of each unit of the Scheme
(an open ended Index Linked Exchange Traded Fund)
Offer for Sale of Units at Rs.10/- (On allotment, the value of each unit of the Scheme would be approximately equal to 1/100th of the value of Nifty 8-13 yr G Sec Index) per unit during the new fund offer period and Continuous offer for Units at NAV based prices
Short term Global India Interest rate Rising Falling Growth Subdued Rising Reform momentum Muted Improving Financial stability Weak Strong 2 Long term Global India Demographics Unfavorable Favorable Savings Falling Rising Growth Subdued Strong Productivity Falling Rising Both from medium to long term India is in a rare sweet spot In the history of financial markets there will be very few markets which have had these kind of edges over the rest of the world
Launched in January 2011, Nifty 8-13 yr G-Sec Index is designed to provide the broad representation of the Government of India bonds having maturity of around 10 years.
The index aims to capture the performance of the most liquid bonds with maturities between 8-13 years.
Nifty 8-13 yr G-Sec is constructed using the prices of top 5 (in terms of traded value) liquid Government of India bonds with residual maturity between 8 to 13 years and have outstanding issuance exceeding Rs. 5000 crores.
The individual bonds are assigned weights considering the traded value and
Nifty 8-13 yr G-Sec Index represents the most active tenor of the Indian G-Sec market.
Source : IISL
Source : IISL
Index represents Government of India Bonds having residual maturity between 8-13 years.
Top 5 liquid bonds based on turnover during the month shall be eligible to be part of the index with outstanding amount of the bond be more than Rs.5,000 crores
Each bond is assigned weight based on liquidity and outstanding amount, liquidity of the bond has a weight of 40% and outstanding amount has weight
Weights of the bond are determined at beginning of the month and remain constant during the entire month and Index is reviewed on a monthly basis
the index values will be live during the markets trading hours and closing price published at end of the day
The index is computed using the total returns methodology and FIMMDA prices are used for valuation of the bonds in the index.
Accrued interest is calculated using 30/360 day count convention
Source : IISL Past Performance may or may not be sustained in future and the same may not necessarily provide the basis for comparison with other investment.
900 1000 1100 1200 1300 1400 1500 1600 03-Jan-11 03-Apr-11 03-Jul-11 03-Oct-11 03-Jan-12 03-Apr-12 03-Jul-12 03-Oct-12 03-Jan-13 03-Apr-13 03-Jul-13 03-Oct-13 03-Jan-14 03-Apr-14 03-Jul-14 03-Oct-14 03-Jan-15 03-Apr-15 03-Jul-15 03-Oct-15 03-Jan-16 03-Apr-16 Nifty 8-13 Yr Benchmark G-Sec Index Values
Source : IISL Past Performance may or may not be sustained in future and the same may not necessarily provide the basis for comparison with other investment.
Source : IISL as on 31-May-2016
ETFs are Mutual Fund schemes and listed & traded on the
An ETF represents a basket of stocks that reflect an index An ETF helps you to achieve portfolio diversification, risk
Basket of asset instead
Can be traded like a stock Bought and sold on a stock exchange
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Structured like Mutual Funds, but listed & traded on the exchange like stocks
An ETF represents a basket of stocks that reflect an index
An ETF helps you to achieve portfolio diversification, risk mitigation, cash equitization & relatively low cost
Ease of transaction - Can be easily bought / sold like any other stock on the exchange subject to availability of buyer and seller through terminals spread across the country
Ease of Liquidity - Can be bought / sold anytime during market hours at prices that are expected to be close to actual NAV of the
Other Special Features
Instant diversification through exposure to a large number of stocks by purchasing as low as 1 unit
Efficient tool to execute strategies like arbitraging between cash & futures market
Ability to put limit orders
Low Cost Long Index Exposure – Derivatives have a high roll-over cost and also known for short term gains, ETFs hence makes a cost efficient option for maintaining long index positions.
Cash Equitization – Investors who maintain cash positions, awaiting suitable investment options, can use ETFs to gain instant exposure to equity markets as per their asset allocation, helping them access and not miss out on any market movements
Core / Satellite Investment Strategies - ETFs allow investors to maintain broad- based / fundamental index ETF as their core and actively move satellite investment exposure to momentum or sector ETFs as per the market movements
Sector Rotation / Tactical Allocation – ETFs can be used to add or be
Portfolio Completion - ETFs allow investors to fill gaps in a portfolio in specific asset classes or sectors
Use of ETFs by Arbitrator* - Low cost ETFs assist in arbitrages as buying ETF is fairly convenient compared to buying the entire set of stocks in the index basket
*Subject to the market condition and availability of spread and liquidity.
Reliance Mutual Fund
Investment Amount During NFO ETF units Cash Securities Allotment of Units Securities
Authorized Participants / Financial Institutions
Buy / Sell Market making / arbitrage Cash ETF units Cash ETF units Subscription / redemption in-kind
ETF Stocks Exposure in G Sec Index Buying a Single unit Need to buy 5 Securities Rebalancing Easy Difficult Transaction Procedure Only a single unit needs to be purchased 5 different securities in different weightage needs to be purchased Minimum Investment Single Unit Price depending
unit is 1/10 of the Index, 1405/100= 14.05 one needs to spend only 14.05 Rs to buy one unit The cost of buying 5 securities at their market price.(Very High Cost as compare to ETF & Derivatives)
Above table only shows investment in Nifty 8-13 yr G-Sec through different modes. Investors may makes investment in Gsec via other modes
(An open-ended, Index Exchange Traded Fund)
Investment in R*Shares Gilt ETF is a route to G-Sec investing in India
It allows investors to take part in India growth story by essentially investing in 5 most liquid bonds in the G-Sec space with maturities between 8-13 years .
The index is designed to serve as both a benchmark and an investable index and is comprised of securities providing representation of the Government of India bonds having maturity of around 10 years.
Investments in R*Shares Gilt ETF can form part of “core debt portfolio”, especially for Institutional investors
By investing in R*Shares Gilt ETF, strategies like “cash equitization” can be effectively deployed because of its inherent advantages like one of the best market representation.
R*Shares Long Term Gilt ETF will be listed as an Exchange Traded Fund (ETF) on NSE Ltd. with Reliance Nippon Life Asset Management Limited (RNLAM) (formerly Reliance Capital Asset Management Limited) being the Asset Manager of R*Shares Long Term Gilt ETF
R*Shares Long Term Gilt ETF will invest in Nifty 8-13 yr G-Sec Index securities
Launched in January 20011, the Index is the structured to capture the performance
* - Source : www.nse-india.com
Investment Objective
The investment objective of R*Shares Long Term Gilt ETF is to provide returns that, before expenses, closely correspond to the total returns of the securities as represented by the Nifty 8-13 yr G- Sec Index subject to tracking errors. However there can be no assurance or guarantee that the investment objective of the Scheme will be achieved.
Nature of Scheme
An Open Ended, Index Linked Exchange Traded Fund
Benchmark
Nifty 8-13 yr G-Sec Index Securities constituting Nifty 8-13 yr G Sec Index 95%-100% Money Market instruments including CBLO 0%-5% (with maturity not exceeding 91 days)
Listed on Recognized Stock Exchanges & available for trade in 1 (one) unit and in multiples of 1 unit and with AMC in form of creation unit size of 2,50,000units and multiples thereafter
Load Structure
Entry & Exit Load : Nil
Transparency/NAV Disclosure
The NAV will be calculated & disclosed on or before 5 working days from the closure of NFO and subsequently at the close of every working day which shall be published in at least two daily newspapers and also uploaded
Units of the scheme will be available in Dematerialized (electronic) form only. The applicant under the scheme will be required to have a beneficiary account with a Depository Participant of NSDL/CDSL and will be required to indicate in the application the Depository Participants (DP)name, DP ID Number & the beneficiary account number of the applicant.
Minimum Application Amount
Exchange : The minimum number of Units that can be bought or sold on the exchange is 1 (one) unit and in multiples of 1 unit. Directly from AMC : Restricted to Authorized Participants & Large Investors in form of creation unit size of 2,50,000 units & in multiples thereafter
Dematerialization Allotment of Units
The value of each unit of the Scheme would be approximately equal to 1/100th of the value of Nifty 8-13 yr G-Sec Index
Liquidity: Apart from being readily available for trade on the recognized stock exchanges, ETF units can also be bought in creation units size by large investors directly from the asset management company
Less of Ambiguity: The ETF’s investment strategy & stock selection is clearly defined, holding stocks as per the underlying Index in the same weightages, monitored and adjusted (if required) for any index change on a daily basis
Diversification: Buying a single unit will offer diversification benefit in the entire index companies
Transparency: The index constituents are available in the public domain on a daily basis (available on Bloomberg page “RITE”)
Disclaimer - Please refer respective SID /KIM to know more about RMF Scheme
Subscription Process Features Through Stock Exchange
/ stock broker
Through AMC (Authorized Participants & Large Investors) Transaction form with requisite documents
Component Redemption Process Features Through Stock Exchange
/ stock broker
Through AMC (Authorized Participants & Large Investors) Redemption Request
Component
Live Prices (NAV) with the basket is available on Bloomberg page “RITE” for reference
Senior Fund Manger – Fixed Income Investments.
Total work experience of over 14 years
Prashant R Pimple is Fund Manager of various debt funds of Reliance Mutual fund i.e. Reliance Short Term Fund, Reliance Income Fund, Reliance Dynamic Bond Fund, Reliance Corporate Bond Fund, Reliance Regular Saving Fund – Debt
Previous stints include portfolio manager with Fidelity International Limited Asset Management Company and as Portfolio Manager in Investment Advisory Services (Debt Institutional) in ICICI Bank
trader with Bank of Bahrain and Kuwait, B.S.C. and The Saraswat Co-operative Bank Ltd. He also had a stint with SIDBI in the Project Finance Division
Specialist in Duration Funds and Government Securities dealings.
Scheme Specific Risk Factors: Trading volumes and settlement periods may restrict liquidity in equity and debt investments. Investment in Debt is subject to price, credit, and interest rate risk. The NAV of the Scheme may be affected, inter alia, by changes in the market conditions, interest rates, trading volumes, settlement periods and transfer procedures. The NAV may also be subjected to risk associated with tracking error, investment in derivatives or script lending as may be permissible by the Scheme Information Document. NSE Disclaimer: It is to be distinctly understood that the permission given by NSE should not in any way be deemed or construed that the Scheme Information Document has been cleared or approved by NSE nor does it certify the correctness or completeness of any of the contents of the Draft Scheme Information Document. The investors are advised to refer to the Scheme Information Document for the full text of the Disclaimer Clause of NSE
Disclaimers
The information herein is meant only for general reading purposes and the views being expressed only constitute opinions and therefore cannot be considered as guidelines, recommendations or as a professional guide for the readers. Certain factual and statistical information (historical as well as projected) pertaining to Industry and markets have been obtained from independent third- party sources, which are deemed to be reliable. It may be noted that since RNLAM has not independently verified the accuracy or authenticity of such information or data, or for that matter the reasonableness of the assumptions upon which such data and information has been processed or arrived at; RNLAM does not in any manner assures the accuracy or authenticity of such data and
may have been formed on the basis of such data or information.
Before making any investments, the readers are advised to seek independent professional advice, verify the contents in order to arrive at an informed investment decision. None of the Sponsor, the Investment Manager, the Trustee, their respective directors, employees, affiliates or representatives shall be liable in any way for any direct, indirect, special, incidental, consequential, punitive or exemplary damages, including on account of lost profits arising from the information contained in this material.
Mutual Fund investments are subject to market risks, read all scheme related documents carefully.