Reliance Dual Advantage Fixed Tenure Fund I – Plan J(A Close Ended Income Scheme)

NFO Opens: 11th April 2011NFO Cl 25th A il 2011NFO Closes: 25th April 2011

MARKETS & ECONOMY

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M E G th D iMacro Economy – Growth DynamicsGrowth momentum consolidating;

• On higher base

• Inflation at elevated levels

• Concerted central bank efforts leading to high cost of capital

Outlook may turn cautious and growth may disappoint in the short run if interest rates

and inflation remain stickyand inflation remain sticky

But medium term prospects remain positive due to

• Robust expansion in private services

• Strong consumption, both rural and urban

• Acceleration in export demand

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• Strong investment pipeline with emphasis on infrastructure.

Macro Economy – Inflation DynamicsInflation will remain sticky and average to about 6.5% - 7% in the first half

• Rising global commodity and oil prices on middle-east tensions, better US outlook

and emerging market demand

• Higher domestic demand

• Supply side constraints

However unlike last year, inflation now a global worry

Expect concerted central bank action (globally) to raise rates and remove liquidity

Stabilizing impact on primary articles and commodity prices

Expect inflation to start moderating by the second half, leading to a favorable market

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environment

Fi d I M k tFixed Income Markets

Most of the negatives on inflation, liquidity and RBI action is already priced in

Fiscal position is steadily improving

Budget, a huge positive from intent perspective

Liquidity improving currently due to strong deposit growthLiquidity improving currently due to strong deposit growth

Inflation to moderate in the next 4-6 months

RDAFTF I offers a great lock-in opportunity for 3 years at current high rates

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E it M k tEquity Markets

India enjoys an unique position :India enjoys an unique position :

2nd fastest growing economy in the world

A domestic story – Relatively low dependence on global economy

Lot of opportunities are in place for a sustained long term growth:

FII & FDI inflow might showcase a surprise on the upside

Valuations are reasonably attractive post 15% correction in the marketsValuations are reasonably attractive post ~15% correction in the markets.

Earnings growth is expected to range between 15%-20% in the next 3 years & hence

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provide shareholders return

P iti i f RDAFTF I Pl JPositioning of RDAFTF I – Plan J

The fund is mandated to invest 80%-95% in assets in Debt Securities & Money Market

Instruments and 5% - 20% in Equity & Equity Related Instruments

The fixed income market has been quite volatile for the past few months. Being a

close ended, passively managed fund, the benefits of locking in at the current high

levels in a high inflationary scenario can be reaped as liquidity & inflationary scenariog y p q y y

improves

3 years is an appropriate time frame for equity as an asset class to deliver healthy

returns

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Investor’s need at this hour

In the current high inflationary market scenario a product that provides a hedgeIn the current high inflationary market scenario, a product that provides a hedgeagainst inflation maintaining a prudent risk-return balance is of paramount importance.

Given that the current rise in short to medium tenor bond yields due to tight liquidityconditions, the product which invests at these high yields will generate healthy accrualbased returns with improving bond scenario going forward

Given the strong domestic growth environment, the medium term outlook isencouraging. In the near term, international events do create volatility, which couldg g , y,throw up opportunities to create high quality long term portfolios. Hence, investment inequity would be beneficial in the long term.

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RELIANCE MUTUAL FUND presents

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Reliance Dual Advantage Fixed Tenure Fund I – Plan J

Reliance Dual Advantage Fixed Tenure Fund I Plan J (henceforth RDAFTF - J) is aclosed ended income scheme which intends to invest 80% - 95% of its assets in DebtSecurities & Money Market Instruments and 5% - 20% in Equity & Equity RelatedInstrumentsInstruments

For the fixed income oriented long term investor, RDAFTF I - Plan J intends to providethe dual advantage of stability in investments along with the added advantage ofearning returns relatively higher than a typical fixed income investment

While the debt portion offers potential for higher accruals in the current marketsituation with a reduced interest rate risk, the equity portion of the portfolio would seek

f f

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to benefit from the higher growth potential given the 3 years holding period.

P d t R ti lProduct RationaleAllocation of the savings appropriately is of high significance as it helps an investorearn the req ired rate of ret rn to meet his indi id al financial goals in long termearn the required rate of return to meet his individual financial goals in long term

As per the trend in the market, products with low risk & stable returns normally offermoderate rate of returns but lucrative investments require an appropriate balance ofrisk and return

In the current investment scenario, even a conservative investment decision requiresto earn better than secured return products backed by Government & Banks like RBIBonds Post Office Schemes to hedge against the growing inflation levelBonds, Post Office Schemes to hedge against the growing inflation level

Our product attempts to meet both ends of an investor’s expectation :- relativelyt bl t f t f d bt l bb d ith hi h th t ti l f it t

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stable rate of returns from debt clubbed with higher growth potential of equity tohelp the investor earn relatively better returns than a normal debt product.

Key Benefits of RDAFTF - I - Plan J

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Twin Advantage

Stability of debt + Power of equity

3 years holding Most of the traditional investment avenues lik RBI B d P t Advantage y g

period gives fund managers the

liberty to execute their long terms

like RBI Bonds, Post Office Schemes etc with 5 to 6 years of lock in period offers

moderate rate of In house

Research & Fund

Management Expertise

Edge over traditional

debt products USPcalls/views on various well

researched long term credits, structures

return. RDAFTF – I –Plan J intends to hedge against

growing inflation and will aim to provide

Close ended nature

structures, stocks & sectors

higher returns than a typical fixed income

investments.

Indexation Benefits + ForReduced loss

of carryTaxation

Close ended nature reduces the need to

maintain liquidity in the portfolio which enhances

the portfolio yield

Indexation Benefits + For highest tax bracket investor

post tax returns vsbonds&/FD is more tax

efficient .

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Investments in RBI Bonds, Post Offices and Bank Fixed Deposits are relatively safer investment avenues. Bank Fixed Deposits are covered under Deposit Insurance and Credit Guarantee Corporation of India to the extent of Rs. 1 lakh per account. The information provided may not necessarily provide a basis for comparison with other

investment avenues. The tax benefits are as per the current Income Tax laws & rules and any other law for the time being in force. Readers are advised to seek independent professional advice and consult their tax advisors and arrive at an informed investment decision before making any investments.

Fund Strategy

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Investment StrategyInvestment Strategy

The investment process intends to meet fund specific investment objectives anddevelop a well diversified high credit portfolio that minimizes liquidity risk and creditdevelop a well-diversified, high credit portfolio that minimizes liquidity risk and creditrisk.The investment process is intensely research oriented. It comprises of qualitative aswell as quantitative measures.well as quantitative measures.The debt portion will be invested in high quality fixed income securities that aregenerally maturing in line with the duration of the scheme.The equity portion of the scheme will invest in diversified portfolio of stocks acrossq y p pmarket capitalization.The funds will follow a bottom-up approach to stock-picking and choose companiesacross sectors.The scheme shall follow a blend of value and growth style of investing & willprimarily focus on companies that have demonstrated characteristics such as marketleadership, strong financials and quality management, and have the potential to createwealth for their shareholders by delivering steady performance through the ups and

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wealth for their shareholders by delivering steady performance through the ups anddowns of the market.

Product Features

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InvestmentThe Scheme seeks to generate returns and reduce interest rate volatility,through a portfolio of fixed income securities that are maturing on or

Product Features

Investment Objective

through a portfolio of fixed income securities that are maturing on orbefore the maturity of the Scheme along with capital appreciation throughequity exposure.

Nature of Scheme A Close Ended Income Scheme

NFO Dates NFO Opens: 11th April 2011; NFO Closes: 25th April 2011

Nature of Scheme

Benchmark Crisil MIP Blended Index

Debt Securities & Money Market Instruments*#80% - 95%

Equity & Equity related instruments#5% - 20%

Asset Allocation

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# including investments in ADR/GDR/Foreign Securities up to 40% of the equity/ debt portion, exposure in derivatives up to a maximum of 40%.

Choice of

Product Features

Choice of Plans/Options

Growth Option ; Dividend Payout Option

Minimum Application R 5000/ ti d i lti l f R 1 th ftMinimum Application Amount

Rs 5000/- per option and in multiples of Re. 1 thereafter

Duration 3 years from the date of allotment of units

Load StructureEntry Load: Nil*Exit Load: Nil

(Since the scheme shall be listed on the exchange)

Fund Manager Ms Anju Chhajer & Mr. Shailesh Bhan

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*In terms of SEBI circular no. SEBI/IMD/CIR No.4/ 168230/09 dated June 30, 2009, no entry load will be charged by the Scheme to the investor effective August 1, 2009. Upfront commission shall be paid directly by the investor to the AMFI registered Distributors based on the investors'

assessment of various factors including the service rendered by the distributor

DisclaimerDisclaimerThe views herein constitute only the opinions and do not constitute any guidelines or recommendation onany course of action to be followed by the reader. This information is meant for general reading purposeonly and is not meant to serve as a professional guide for the readers This document has been preparedonly and is not meant to serve as a professional guide for the readers. This document has been preparedon the basis of publicly available information, internally developed data and other sources believed to bereliable. The Sponsor, The Investment Manager, The Trustee or any of their respective directors,employees, affiliates or representatives do not assume any responsibility for, or warrant the accuracy,completeness, adequacy and reliability of such information. Whilst no action has been solicited basedupon the information provided herein, due care has been taken to ensure that the facts are accurate andopinions given fair and reasonable. This information is not intended to be an offer or solicitation for thepurchase or sale of any financial product or instrument. Recipients of this information should rely oninformation/data arising out of their own investigations. Readers are advised to seek independentprofessional advice and arrive at an informed investment decision before making any investments Noneprofessional advice and arrive at an informed investment decision before making any investments. Noneof The Sponsor, The Investment Manager, The Trustee, their respective directors, employees, affiliates orrepresentatives shall be liable for any direct, indirect, special, incidental, consequential, punitive orexemplary damages, including lost profits arising in any way from the information contained in thismaterial. The Sponsor, The Investment Manager, The Trustee, any of their respective directors,

l i l di th f d ffili t t ti i l di i l d i themployees including the fund managers, affiliates, representatives including persons involved in thepreparation or issuance of this material may from time to time, have long or short positions in, and buy orsell the securities thereof, of company(ies) belonging to sectors mentioned hereinNSE Disclaimer: It is to be distinctively understood that the permission given by the NSE should not inany way be deemed or construed that the Scheme Information Document has been cleared or approved

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any way be deemed or construed that the Scheme Information Document has been cleared or approvedby NSE nor does it certify the correctness or completeness of any of the contents of Draft SchemeInformation Document. The investors are advised to refer to the Scheme Information Document for thefull text of Disclaimer Clause of NSE.

DisclaimerDisclaimerStatutory Details: Reliance Mutual Fund has been constituted as a trust in accordance with theprovisions of the Indian Trusts Act, 1882. Sponsor: Reliance Capital Limited. Trustee: Reliance CapitalTrustee Company Limited Investment Manager: Reliance Capital Asset Management LimitedTrustee Company Limited. Investment Manager: Reliance Capital Asset Management Limited(Registered Office of Trustee & Investment Manager: “Reliance House” Nr. Mardia Plaza, Off. C.G. Road,Ahmedabad 380 006). The Sponsor, the Trustee and the Investment Manager are incorporated under theCompanies Act 1956. The Sponsor is not responsible or liable for any loss resulting from the operation ofthe Scheme beyond their initial contribution of Rs.1 lakh towards the setting up of the Mutual Fund andsuch other accretions and additions to the corpus.Terms of issue (including Listing and Liquidity provisions): The Scheme being a close ended incomescheme; the units can be purchased only during the New Fund Offer period of the scheme. Noredemption/repurchase of units shall be allowed prior to the maturity of the Scheme. The Unit holders aregiven an Option to hold the units by way of an Account Statement (Physical form) or in Dematerializedgiven an Option to hold the units by way of an Account Statement (Physical form) or in Dematerialized(‘Demat’) form. The units held in Demat form will be listed on the National Stock Exchange of India Ltd.(NSE) / or any other recognized Stock Exchange. The investor can buy/sell units of the Scheme on acontinuous basis on the NSE and other recognized stock exchanges. The trading lot is one unit of thePlan. Investors can purchase units at market prices, which may be at a premium /discount to the NAV ofthe scheme depending upon the demand and supply of units at the exchanges. The NAV of the Schemewill be calculated and disclosed at the close of every Business day which shall be published in at least intwo daily newspapers and also uploaded on AMFI site i.e. www.amfiindia.com and Reliance Mutual Fundwebsite i.e. www.reliancemutual.com

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DisclaimerRisk Factors: Mutual Funds and securities investments are subject to market risks and there is noRisk Factors: Mutual Funds and securities investments are subject to market risks and there is noassurance or guarantee that the objectives of the Scheme will be achieved. As with anyinvestment in securities, the NAV of the Units issued under the Scheme can go up or downdepending on the factors and forces affecting the capital markets. Reliance Dual Advantage FixedTenure Fund I – Plan I is only the name of the Scheme does not in any manner indicate either thequality of the Scheme; its future prospects or returns Past performance of the Sponsor/AMC/Mutualquality of the Scheme; its future prospects or returns. Past performance of the Sponsor/AMC/MutualFund is not indicative of the future performance of the Scheme. The NAV of the Scheme may be affected,interalia, by changes in the market conditions, interest rates, trading volumes, settlement periods andtransfer procedures. The Mutual Fund is not assuring that it will make periodical dividend distributions,though it has every intention of doing so. All dividend distributions are subject to the availability ofdistributable surplus in the Scheme. There are various risks associated with investing in Equities,Bonds (Interest Rate Risk, Liquidity or Marketability Risk, Credit Risk, Reinvestment Risk), ForeignSecurities, Derivatives, Securitised Debt, Short Selling & Securities Lending and with Listing ofUnits. For more details of the Schemes and detailed risk factors, please refer to the Scheme InformationDocument and Kim cum Application Form which is available free of cost with all the DISC DistributorsDocument and Kim cum Application Form, which is available free of cost with all the DISC, Distributorsand www.reliancemutual.com. Investors may also call our Customer Care Number 1800 - 300 -11111(Toll free) or 022 – 3030 1111 or can write us on customer.care@reliancemutual.com. Mutual Fundsinvestments are subject to market risks. Please read the Scheme Information Document andStatement of Additional Information carefully before investing.

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