Reliance Mutual Fund

- “R*Shares Long Term Gilt ETF” (an open ended Index Linked Exchange Traded Fund)

India is in a sweet spot compared to rest of the world..

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

Fixed Income – Current Scenario

Nifty 8-13 yr G-Sec Index

A route to Invest in Indian G-Sec market

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

outstanding issuance in the ratio of 40:60

Nifty 8-13 yr G-Sec Index represents the most active tenor of the Indian G-Sec

market.

About Nifty 8-13 yr G-Sec Index

Source : IISL

Nifty 8-13 yr G-Sec – Index Methodology

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

of 60%.

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

Nifty 8-13 yr G-Sec – Index Movement

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

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Nifty 8-13 Yr Benchmark G-Sec Index Values

Nifty 8-13 yr G-Sec Index – Calendar Year Returns

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.

Calander Years Returns Average Maturity (In Yrs)

2011 4.64% 10.22

2012 11.17% 10.28

2013 -0.62% 10.35

2014 16.57% 10.7

2015 7.73% 10.53

YTD Returns as on 28th October 2016 is 12.37% on absolute basis

Constituents of Nifty 8-13 yr G- Sec Index

Source : IISL as on 28-Oct-2016

Sl No. Security ISIN Maturity Weights (%)

1 7.59% G.S. 2026 IN0020150093 11/01/2026 34.87

2 7.59% G.S. 2029 IN0020150069 20/03/2029 26.86

3 7.72% G.S. 2025 IN0020150036 25/05/2025 16.70

4 8.15% G.S. 2026 IN0020140060 24/11/2026 14.78

5 6.97% G.S. 2026 IN0020160035 06/09/2026 6.79

Why Invest In

Exchange Traded Fund (ETF)?

ETFs are Mutual Fund schemes and 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

management & cash equitization at a relatively low cost

About Exchange Traded Funds (ETFs)

Basket of asset instead

of a single stock

Can be traded like a

stock

Bought and sold on a

stock exchange

10

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

Scheme. Thus, investor transacts at real-time prices instead of end-

of-day prices subject to availability of buyer and seller

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

ETF UNIT

ETF Fund

Basket of

Stocks

ETFs – Concepts

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 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

overweight specific markets, sectors or industries to a core portfolio

Portfolio Completion - ETFs allow investors to fill gaps in a portfolio in specific

asset classes or sectors

Use of ETFs by Arbitragors - 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.

ETFs – an effective tool for one’s portfolio

13

Working Mechanism ETFs

Primary Market Secondary

Market

Authorized

Participants /

Financial Institutions Stock Exchange

Fund Buyer

Seller

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

on the unit size For eg If one

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

also. Investors are advised to consult their financial advisor before making any investment

Investment in G-Sec via different Modes

R*Shares Long Term Gilt ETF (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.

Positioning –R*Shares Gilt ETF

ETI

About R*Shares Long Term Gilt ETF

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

only, in the same proportion as the underlying index, monitored and corrected (if

required) daily

Launched in January 20011, the Index is the structured to capture the performance

of the most liquid bonds in the G-Sec space with maturities between 8-13 years.

Investment objective or R*Shares Long Term Gilt ETF would be 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 would be achieved

* - Source : www.nse-india.com

Scheme Features : R*Shares Long Term Gilt ETF

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)

Asset Allocation

Liquidity 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

R*Shares Long Term Gilt ETF – Current Portfolio

Source : RMF Factsheet as on Oct 31, 2016

Past Performance may or may not be sustained in future and the same may not necessarily provide the basis for comparison with other

investment.

Tradable Unit Composition Creation Unit Size

NAV

28-Oct-

16

Approx.

Basket

Value (Rs.)

1 Unit

R*Shares Long

Term Gilt ETF

~ 1/100 of Nifty 8-

13 yr G-sec Index

250000 units of

R*Shares Long

Term ETF

16.2261 40,88,700

Scheme Name Index

Value YTM

Average

Maturity

Modified

Duration

R*Shares Long Term

Gilt ETF 1636.63 6.95% 9.92 years 6.75 years

Creation Unit Size

Portfolio Details

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

on the AMFI website and RMF website.

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

Scheme Features : R*Shares Long Term Gilt ETF

Trading options available

Subscription Process Features

Through Stock

Exchange

online terminal

/ stock broker

• Can trade as less as 1 Unit

• Funding to be done on T+1

• Unit credit on T+2

• Transaction on Exchange traded price

• No paperwork

• Transaction on order matching and availability of quotes

Through AMC

(Authorized

Participants &

Large Investors)

Transaction

form with

requisite

documents

• Can transact in multiples of creation unit size

• Can happen in Cash or basket of stocks

• Transaction in exchange of Portfolio deposit & Cash

Component

Redemption Process Features

Through Stock

Exchange

online terminal

/ stock broker

• Can trade as less as 1 Unit

• Units taken on T+1

• Amount credited T+2

Through AMC

(Authorized

Participants &

Large Investors)

Redemption

Request

• Can trade in multiples of creation unit size

• Can happen in Cash or basket of stocks

• Transaction in exchange of Portfolio deposit & Cash

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

option and Reliance gilt Securities Fund.

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

Ltd. From 2000 to 2003, he was a fixed income

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.

About the Fund Manager

Disclaimer

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

information. Some of the statements & assertions contained in these materials may reflect RNLAM’s views or opinions, which in turn

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.

Thank You