Understanding

Mutual Fund
Nitin Kumar
Mutual Funds

Before we understand what is mutual fund, it’s very important to know the area in
which mutual funds works, the basic understanding of stocks and bonds.

Stocks : Stocks represent shares of ownership in a public company. Examples of public

companies include Reliance, ONGC and Infosys. Stocks are considered to be the most
common owned investment traded on the market.

Bonds : Bonds are basically the money which you lend to the government or a company, and
in return you can receive interest on your invested amount, which is back over predetermined
amounts of time. Bonds are considered to be the most common lending investment traded on
the market. There are many other types of investments other than stocks and bonds (including
annuities, real estate, and precious metals), but the majority of mutual funds invest in stocks
and/or bonds.

What Is Mutual Fund

A mutual fund is just the connecting bridge or a financial intermediary that allows a
group of investors to pool their money together with a predetermined investment objective.
The mutual fund will have a fund manager who is responsible for investing the gathered
money into specific securities (stocks or bonds). When you invest in a mutual fund, you are
buying units or portions of the mutual fund and thus on investing becomes a shareholder or
unit holder of the fund.

Mutual funds are considered as one of the best available investments as compare to
others they are very cost efficient and also easy to invest in, thus by pooling money together
in a mutual fund, investors can purchase stocks or bonds with much lower trading costs than
if they tried to do it on their own. But the biggest advantage to mutual funds is
diversification, by minimizing risk & maximizing returns.

Thus a Mutual Fund is the most suitable investment for the common man as it offers an
opportunity to invest in a diversified, professionally managed basket of securities at a
relatively low cost. The flow chart below describes broadly the working of a mutual fund
Type of Mutual Fund Schemes
BY STRUCTURE

Open Ended Schemes

An open-end fund is one that is available for subscription all through the year. These do not
have a fixed maturity. Investors can conveniently buy and sell units at Net Asset Value
("NAV") related prices. The key feature of open-end schemes is liquidity.

Close Ended Schemes

A closed-end fund has a stipulated maturity period which generally ranging from 3 to
15 years. The fund is open for subscription only during a specified period. Investors can
invest in the scheme at the time of the initial public issue and thereafter they can buy or sell
the units of the scheme on the stock exchanges where they are listed. In order to provide an
exit route to the investors, some close-ended funds give an option of selling back the units to
the Mutual Fund through periodic repurchase at NAV related prices. SEBI Regulations
stipulate that at least one of the two exit routes is provided to the investor.

Interval Schemes

Interval Schemes are that scheme, which combines the features of open-ended and
close-ended schemes. The units may be traded on the stock exchange or may be open for sale
or redemption during pre-determined intervals at NAV related prices.
BY INVESTMENT OBJECTIVE

Equity funds: These funds invest in equities and equity related

instruments. With fluctuating share prices, such funds show volatile

performance, even losses. However, short term fluctuations in the market,

generally smoothens out in the long term, thereby offering higher returns at

relatively lower volatility. At the same time, such funds can yield great capital

appreciation as, historically, equities have outperformed all asset classes in the

long term. Hence, investment in equity funds should be considered for a period

of at least 3-5 years. It can be further classified as:

i) Index funds- In this case a key stock market index, like BSE Sensex or Nifty is
tracked. Their portfolio mirrors the benchmark index both in terms of composition

and individual stock weightages.

ii) Equity diversified funds- 100% of the capital is invested in equities spreading

across different sectors and stocks.

iii|) Dividend yield funds- it is similar to the equity diversified funds except that they

invest in companies offering high dividend yields.

iv) Thematic funds- Invest 100% of the assets in sectors which are related through

some theme.

e.g. -An infrastructure fund invests in power, construction, cements sectors etc.

v) Sector funds- Invest 100% of the capital in a specific sector. e.g. - A banking

sector fund will invest in banking stocks.

vi) ELSS- Equity Linked Saving Scheme provides tax benefit to the investors.
Balanced fund: Their investment portfolio includes both debt and equity. As a
result, on the risk-return ladder, they fall between equity and debt funds. Balanced

funds are the ideal mutual funds vehicle for investors who prefer spreading their risk

across various instruments. Following are balanced funds classes:

i) Debt-oriented funds -Investment below 65% in equities.

ii) Equity-oriented funds -Invest at least 65% in equities, remaining in debt.

Debt fund: They invest only in debt instruments, and are a good option for

investors averse to idea of taking risk associated with equities. Therefore, they invest

exclusively in fixed-income instruments like bonds, debentures, Government of India

securities; and money market instruments such as certificates of deposit (CD),

commercial paper (CP) and call money. Put your money into any of these debt funds

depending on your investment horizon and needs.

i) Liquid funds- These funds invest 100% in money market instruments, a large

portion being invested in call money market.

ii) Gilt funds ST- They invest 100% of their portfolio in government securities of and

T-bills.

iii) Floating rate funds - Invest in short-term debt papers. Floaters invest in debt

instruments which have variable coupon rate.

iv) Arbitrage fund- They generate income through arbitrage opportunities due to

mis-pricing between cash market and derivatives market. Funds are allocated to

equities, derivatives and money markets. Higher proportion (around 75%) is put in

money markets, in the absence of arbitrage opportunities.

 v) Gilt funds LT- They invest 100% of their portfolio in long-term government

securities.

vi) Income funds LT- Typically, such funds invest a major portion of the portfolio in

long-term debt papers.

vii) MIPs- Monthly Income Plans have an exposure of 70%-90% to debt and an

exposure of 10%-30% to equities.

viii) FMPs- fixed monthly plans invest in debt papers whose maturity is in line with

that of the fund.

Types of returns:

There are three ways, where the total returns provided by mutual funds can be enjoyed by
investors:
 Income is earned from dividends on stocks and interest on bonds. A fund pays out
nearly all income it receives over the year to fund owners in the form of a distribution.
 If the fund sells securities that have increased in price, the fund has a capital gain.
Most funds also pass on these gains to investors in a distribution.
 If fund holdings increase in price but are not sold by the fund manager, the fund's
shares increase in price. You can then sell your mutual fund shares for a profit. Funds
will also usually give you a choice either to receive a check for distributions or to
reinvest the earnings and get more shares.

Pros & cons of investing in mutual funds:

For investments in mutual fund, one must keep in mind about the Pros and cons of
investments in mutual fund.
Advantages of Investing Mutual Funds:

1. Professional Management - The basic advantage of funds is that, they are professional
managed, by well qualified professional. Investors purchase funds because they do not have
the time or the expertise to manage their own portfolio. A mutual fund is considered to be
relatively less expensive way to make and monitor their investments.

2. Diversification - Purchasing units in a mutual fund instead of buying individual stocks or

bonds, the investors risk is spread out and minimized up to certain extent. The idea behind
diversification is to invest in a large number of assets so that a loss in any particular
investment is minimized by gains in others.

3. Economies of Scale - Mutual fund buy and sell large amounts of securities at a time, thus
help to reducing transaction costs, and help to bring down the average cost of the unit for
their investors.

4. Liquidity - Just like an individual stock, mutual fund also allows investors to liquidate
their holdings as and when they want.

5. Simplicity - Investments in mutual fund is considered to be easy, compare to other

available instruments in the market, and the minimum investment is small. Most AMC also
have automatic purchase plans whereby as little as Rs. 2000, where SIP start with just Rs.50
per month basis.

Disadvantages of Investing Mutual Funds:

1. Professional Management- Some funds doesn’t perform in neither the market, as their
management is not dynamic enough to explore the available opportunity in the market, thus
many investors debate over whether or not the so-called professionals are any better than
mutual fund or investor himself, for picking up stocks.

2. Costs – The biggest source of AMC income, is generally from the entry & exit load which
they charge from an investors, at the time of purchase. The mutual fund industries are thus
charging extra cost under layers of jargon.
3. Dilution - Because funds have small holdings across different companies, high returns
from a few investments often don't make much difference on the overall return. Dilution is
also the result of a successful fund getting too big. When money pours into funds that have
had strong success, the manager often has trouble finding a good investment for all the new
money.

4. Taxes - when making decisions about your money, fund managers don't consider your
personal tax situation. For example, when a fund manager sells a security, a capital-gain tax
is triggered, which affects how profitable the individual is from the sale. It might have been
more advantageous for the individual to defer the capital gains liability.

How will I know if mutual funds are right for me?

Choosing a qualified financial adviser is an important first step in any investment program.
With the help of your financial adviser you’ll want to establish your investment goals, assess
your risk tolerance, and develop a personal investment strategy. Ask your financial adviser if
mutual funds are an appropriate investment for you. Discuss what type of fund best matches
your personal investment strategy, then ask for some specific suggestions.
Once you have identified some funds that seem to meet your investment needs, read the
prospectus and financial statements for each one. Consider:
1. Investment objectives: Are the fund’s investment objective consistent with your
own? Can the fund provide the level of regular income you need? Does it provide the
type of diversification your’re looking for?
2. Risk: Are you confortable with the level of risk associated with the fund? If you have
other i nvestments, would this fund tend to increase or decrease your overall risk
exposure?
3. Time Horizons: Does the investment fit with your expected investment time horizon?
For example, if you are inversting for relatively short time, will sales charges and
redemption fees offset any possible gains? Might the value of the fund be down just
when you need to redeem you investment?
4. Expected Return: Does the fund have potential to provide the returns you need to
meet your goals? Remember, predicting the return of any mutual fund requires that
 you predict the future- something that can never be don with certainty. Past
performance will tell you about the fund’s historical volatitlity and its performance
relative to competing funds, but it is not a reliable indicator of future performance.
The return you can expect from a mutual fund is closely related to is risk. The lower
the risk of the fund, the lower the return you should expect. Be realistic in your
expectations.
5. Costs: Fees and commissions associated with mutual funds will affect your overall
return and can vary widely from one fund to the next. Higher fees and commissions
do not necessarily mean better performance, check and compare fees and
commissions before you invest.
6. Service Provider: Do you know something about the mutual fund firm offering the
mutual funds for sale? You’ll also want to look at the performance history of the fund
manager who selects the securities to be held in the fund.
Tax Considerations: Tax factor acts as the “x-factor” for mutual funds. Tax efficiency affects the
final decision of any investor before investing. The investors gain through either dividends or capital
appreciation but if they haven’t considered the tax factor then they may end loosing.

Debt funds have to pay a dividend distribution tax of 12.50 per cent (plus surcharge and education
cess) on dividends paid out. Investors who need a regular stream of income have to choose between
the dividend option and a systematic withdrawal plan that allows them to redeem units periodically.
SWP implies capital gains for the investor.

If it is short-term, then the SWP is suitable only for investors in the 10-per-cent-tax bracket. Investors
in higher tax brackets will end up paying a higher rate as short-term capital gains and should choose
the dividend option. 

If the capital gain is long-term (where the investment has been held for more than one year), the
growth option is more tax efficient for all investors. This is because investors can redeem units using
the SWP where they will have to pay 10 per cent as long-term capital gains tax against the 12.50 per
cent DDT paid by the MF on dividends.

RELIANCE CAPITAL ASSET MANAGEMENT COMPANY

Reliance Capital Asset Management Limited (RCAM), a company registered under the
Companies Act, 1956 was appointed to act as the Investment Manager of Reliance Mutual
Fund.
Reliance Capital Asset Management Limited (RCAM) was approved as the Asset
Management Company for the Mutual Fund by SEBI vide their letter no IIMARP/1264/95
dated June 30, 1995. The Mutual Fund has entered into an Investment Management
Agreement (IMA) with RCAM dated May 12, 1995 and was amended on August 12, 1997 in
line with SEBI (Mutual Funds) Regulations, 1996. Pursuant to this IMA, RCAM is
authorized to act as Investment Manager of Reliance Mutual Fund. The net worth of the
Asset Management Company including preference shares as on September 30, 2007 is
Rs.152.02 crores.

“Reliance Mutual Fund schemes are managed by Reliance Capital Asset Management
Limited., a subsidiary of Reliance Capital Limited, which holds 93.37% of the paid-up capital
of RCAM, the balance paid up capital being held by minority shareholders.”

Reliance Capital Asset Management Limited (RCAM) was approved as the Asset
Management Company for the Mutual Fund by SEBI by their letter no. IIMARP/1264/95
dated June 30, 1995. The Mutual Fund has entered into an Investment Management
Agreement (IMA) with RCAM dated May 12, 1995 and was amended on August 12, 1997 in
line with SEBI (Mutual Funds) Regulations, 1996. Pursuant to this IMA, RCAM is
authorized to act as Investment Manager of Reliance Mutual Fund. The net worth of the
Asset Management Company including preference shares as on March 31, 2005 is Rs.113.59
crores.

MISSION STATEMENT

To create and nurture a world-class, high performance environment aimed at delighting our
customers.

MUTUAL FUNDS ASSET UNDER MANAGEMENT: TOP 10 COMPANIES LIST

Mutual Fund
 Company Assets Under Management December
2010 (Rs. lakhs.)
Reliance Mutual Fund 10206621.91
HDFC Mutual Fund 8788309.11
ICICI Prudential Mutual Fund 6584087.84
UTI Mutual Fund 6538724.42
Birla Sun Life Mutual Fund 5768946.91
SBI Mutual Fund 4149785.56
Franklin Templeton Mutual Fund 3944260.39
Kotak Mahindra Mutual Fund 2756536.86
Tata Mutual Fund 2085484.83

PRODUCTS

Types of Reliance Mutual Funds

1. Reliance Growth Fund

2. Reliance Vision Fund

3. Reliance Banking Fund

4. Reliance Di versified Power Sector Fund

5. Reliance Pharma Fund

6. Reliance Media & Entertainment Fund

7. Reliance NRI Equity Fund

8. Reliance Equity opportunities Fund

9. Reliance Index Fund

10.Reliance Tax Saver (ELSS) Fund

11.Reliance Equity Fund

12.Reliance Long Term Equity Fund

13.Reliance Regular Saving Fund

RELIANCE MUTUAL FUND SCHEMES

Equity/Growth Schemes
The aim of growth funds is to provide capital appreciation over the medium to long-
term. Such schemes normally invest a major part of their corpus in equities. Such funds have
comparatively high risks. These schemes provide different options to the investors like dividend
option, capital appreciation, etc. and the investors may choose an option depending on their
preferences. The investors must indicate the option in the application form. The mutual funds also
allow the investors to change the options at a later date. Growth schemes are good for investors
having a long-term outlook seeking appreciation over a period of time.

Debt/IncomeSchemes
The aim of income funds is to provide regular and steady income to investors. Such
schemes generally invest in fixed income securities such as bonds, corporate debentures, Government
securities and money market instruments. Such funds are less risky compared to equity schemes.
These funds are not affected because of fluctuations in equity markets. However, opportunities of
capital appreciation are also limited in such funds. The NAVs of such funds are affected because of
change in interest rates in the country. If the interest rates fall, NAVs of such funds are likely to
increase in the short run and vice versa. However, long term investors may not bother about these
fluctuations.

Sector Specific Schemes

These are the funds/schemes which invest in the securities of only those sectors or industries as
specified in the offer documents. e.g. Pharmaceuticals, Software, Fast Moving Consumer Goods
(FMCG), Petroleum stocks, etc. The returns in these funds are dependent on the performance of the
respective sectors/industries. While these funds may give higher returns, they are more risky
compared to diversified funds. Investors need to keep a watch on the performance of those
sectors/industries and must exit at an appropriate time. They may also seek advice of an expert.

EQUITY/GROWTH SCHEMES
Reliance Natural Resources Fund :
(An Open Ended Equity Scheme) The primary investment objective of the scheme is to
seek to generate capital appreciation & provide long-term growth opportunities by investing
in companies principally engaged in the discovery, development, production, or distribution
of natural resources and the secondary objective is to generate consistent returns by investing
in debt and money market securities.

Reliance Equity Fund :

(An open-ended diversified Equity Scheme.) The primary investment objective of the
scheme is to seek to generate capital appreciation & provide long-term growth opportunities
by investing in a portfolio constituted of equity & equity related securities of top 100
companies by market capitalization & of companies which are available in the derivatives
segment from time to time and the secondary objective is to generate consistent returns by
investing in debt and money market securities.

Reliance Tax Saver (ELSS) Fund :

(An Open-ended Equity Linked Savings Scheme.) The primary objective of the scheme
is to generate long-term capital appreciation from a portfolio that is invested predominantly
in equity and equity related instruments.

Reliance Equity Opportunities Fund :

(An Open-Ended Diversified Equity Scheme.) The primary investment objective of the
scheme is to seek to generate capital appreciation & provide long-term growth opportunities
by investing in a portfolio constituted of equity securities & equity related securities and the
secondary objective is to generate consistent returns by investing in debt and money market
securities.
Reliance Vision Fund :
(An Open-ended Equity Growth Scheme.) The primary investment objective of the
Scheme is to achieve long term growth of capital by investment in equity and equity related
securities through a research based investment approach.

Reliance Growth Fund :

(An Open-ended Equity Growth Scheme.) The primary investment objective of the
Scheme is to achieve long term growth of capital by investment in equity and equity related
securities through a research based investment approach.

Reliance Quant Plus Fund (Formerly known as Reliance Index Fund) :

(An Open Ended Equity Scheme.) The investment objective of the Scheme is to generate
capital appreciation through investment in equity and equity related instruments. The Scheme
will seek to generate capital appreciation by investing in an active portfolio of stocks selected
from S & P CNX Nifty on the basis of a mathematical model.

Reliance NRI Equity Fund :

(An open-ended Diversified Equity Scheme.) The Primary investment objective of the
scheme is to generate optimal returns by investing in equity or equity related instruments
primarily drawn from the Companies in the BSE 200 Index.

Reliance Regular Savings Fund

(An Open-ended Scheme.) Equity Option: The primary investment objective of this
option is to seek capital appreciation and/or to generate consistent returns by actively
investing in Equity &Equity-related Securities.

Balanced Option: The primary investment objective of this option is to generate

consistent returns and appreciation of capital by investing in mix of securities comprising of
equity, equity related instruments & fixed income instruments.

Reliance Long Term Equity Fund:

(An close-ended Diversified Equity Scheme.) The primary investment objective of the
scheme is to seek to generate long term capital appreciation & provide long-term growth
opportunities by investing in a portfolio constituted of equity & equity related securities and
Derivatives and the secondary objective is to generate consistent returns by investing in debt
and money market securities.

Reliance Equity Advantage Fund:

(An open-ended Diversified Equity Scheme.) The primary investment objective of the scheme
is to seek to generate capital appreciation & provide long-term growth opportunities by investing in a
portfolio predominantly of equity & equity related instruments with investments generally in S & P
CNX Nifty stocks and the secondary objective is to generate consistent returns by investing in debt
and money market securities.

DEBT/LIQUID SCHEMES

Reliance Monthly Income Plan :

(An Open Ended Fund. Monthly Income is not assured & is subject to the availability of
distributable surplus ) The Primary investment objective of the Scheme is to generate regular income
in order to make regular dividend payments to unitholders and the secondary objective is growth of
capital.

Reliance Gilt Securities Fund - Short Term Gilt Plan & Long Term Gilt Plan :
Open-ended Government Securities Scheme) The primary objective of the Scheme is to generate
Optimal credit risk-free returns by investing in a portfolio of securities issued and guaranteed by the
central Government and State Government

Reliance Income Fund :

(An Open-ended Income Scheme) The primary objective of the scheme is to generate optimal
returns consistent with moderate levels of risk. This income may be complemented by capital
appreciation of the portfolio. Accordingly, investments shall predominantly be made in Debt &
Money market Instruments.

Reliance Medium Term Fund :

(An Open End Income Scheme with no assured returns.) The primary investment objective of
the Scheme is to generate regular income in order to make regular dividend payments to unitholders
and the secondary objective is growth of capital

Reliance Short Term Fund :

(An Open End Income Scheme) The primary investment objective of the scheme is to generate
stable returns for investors with a short investment horizon by investing in Fixed Income Securities of
short term maturity.

Reliance Liquid Fund :

 (Open-ended Liquid Scheme). The primary investment objective of the Scheme is to generate
optimal returns consistent with moderate levels of risk and high liquidity. Accordingly, investments
shall predominantly be made in Debt and Money Market Instruments.

Reliance Floating Rate Fund :

(An Open End Liquid Scheme) The primary objective of the scheme is to generate regular
income through investment in a portfolio comprising substantially of Floating Rate Debt Securities
(including floating rate securitised debt and Money Market Instruments and Fixed Rate Debt
Instruments swapped for floating rate returns). The scheme shall also invest in Fixed rate debt
Securities (including fixed rate securitised debt, Money Market Instruments and Floating Rate Debt
Instruments swapped for fixed returns

Reliance NRI Income Fund :

(An Open-ended Income scheme) The primary investment objective of the Scheme is to
generate optimal returns consistent with moderate levels of risks. This income may be complimented
by capital appreciation of the portfolio. Accordingly, investments shall predominantly be made in debt
Instruments.

Reliance Liquidity Fund :

(An Open - ended Liquid Scheme) The investment objective of the Scheme is to generate
optimal returns consistent with moderate levels of risk and high liquidity. Accordingly, investments
shall predominantly be made in Debt and Money Market Instruments.

Reliance Interval Fund:

(A Debt Oriented Interval Scheme) The primary investment objective of the scheme is to seek
to generate regular returns and growth of capital by investing in a diversified portfolio

Reliance Liquid Plus Fund

(An Open-ended Income Scheme.) The investment objective of the Scheme is to
generate optimal returns consistent with moderate levels of risk and liquidity by investing in
debt securities and money market securities.

Reliance Fixed Horizon Fund –I

(A closed ended Scheme) The primary investment objective of the scheme is to seek to
generate regular returns and growth of capital by investing in a diversified portfolio.
Reliance Fixed Horizon Fund -II
(An closed ended Scheme.) The primary investment objective of the scheme is to seek to
generate regular returns and growth of capital by investing in a diversified portfolio.

Reliance Fixed Horizon Fund -III

(An Close-ended Income Scheme.) The primary investment objective of the scheme is
to seek to generate regular returns and growth of capital by investing in a diversified portfolio

Reliance Fixed Tenor Fund

(An Close-ended Scheme.) The primary investment objective of the Plan is to seek to
generate regular returns and growth of capital by investing in a diversified portfolio.

Reliance Fixed Horizon Fund -Plan C

(An closed ended Scheme.) The primary investment objective of the scheme is to seek to
generate regular returns and growth of capital by investing in a diversified portfolio.

Reliance Fixed Horizon Fund - IV:

(An Close-ended Income Scheme.) The primary investment objective of the scheme is to
seek to generate regular returns and growth of capital by investing in a diversified portfolio

Reliance Fixed Horizon Fund - V:

(An Close-ended Income Scheme.) The primary investment objective of the scheme is to
seek to generate regular returns and growth of capital by investing in a diversified portfolio
of: -
   Central and State Government securities and
   Other fixed income/ debt securities normally maturing in line with the time profile of the
scheme with the objective of limiting interest rate volatility

Reliance Fixed Horizon Fund - VI:

(An Close-ended Income Scheme.) The primary investment objective of the scheme is
to seek to generate regular returns and growth of capital by investing in a diversified portfolio
of: -
Central and State Government securities and
Other fixed income/ debt securities normally maturing in line with the time profile of the
series with the objective of limiting interest rate volatility
Reliance Fixed Horizon Fund - VII:
(An Close-ended Income Scheme.) The primary investment objective of the scheme is to
seek to generate regular returns and growth of capital by investing in a diversified portfolio
of: -
Central and State Government securities and
Other fixed income/ debt securities normally maturing in line with the time profile of the
series with the objective of limiting interest rate volatility.

SECTOR SPECIFIC SCHEMES

Sector Funds are specialty funds that invest in stocks falling into a certain sector of the
economy. Here the portfolio is dispersed or spread across the stocks in that particular sector.
This type of scheme is ideal for investors who have already made up their mind to confine
risk and return to a particular sector.

Reliance Banking Fund

Reliance Mutual Fund has an Open-Ended Banking Sector Scheme which has the
primary investment objective to generate continuous returns by actively investing in equity /
equity related or fixed income securities of banks.

Reliance Diversified Power Sector Fund

Reliance Diversified Power Sector Scheme is an Open-ended Power Sector Scheme.
The primary investment objective of the Scheme is to seek to generate consistent returns by
actively investing in equity / equity related or fixed income securities of Power and other
associated companies.

Reliance Pharma Fund

Reliance Pharma Fund is an Open-ended Pharma Sector Scheme.
The primary investment objective of the Scheme is to generate consistent returns by investing
in equity / equity related or fixed income securities of Pharma and other associated
companies.

Reliance Media & Entertainment Fund

Reliance Media & Entertainment Fund is an Open-ended Media & Entertainment
sector scheme.The primary investment objective of the Scheme is to generate consistent
returns by investing in equity / equity related or fixed income securities of media &
entertainment and other associated companies

EXCHANGE TRADED FUND

Reliance Gold Exchange Traded Fund:

(An open-ended Gold Exchange Traded Fund) the investment objective is to seek to
provide returns that closely correspond to returns provided by price of gold through
investment in physical Gold (and Gold related securities as permitted by Regulators from
time to time). However, the performance of the scheme may differ from that of the domestic
prices of Gold due to expenses and or other related factors.

SOCIAL RESPONSIBILITIES
Organizations, like individuals, depend for their survival, sustenance and growth on the
support and goodwill of the communities of which they are an integral part, and must pay
back this generosity in every way they can. This ethical standpoint, derived from the vision of
the founder, lies at the heart of the CSR philosophy of the Reliance Group.

While they strongly believe that their primary obligation or duty as corporate entities is to
their shareholders “they are just as mindful of the fact that this imperative does not exist in
isolation; it is part of a much larger compact which they have with their entire body of
stakeholders: From employees, customers and vendors to business partners, eco-system, local
communities, and society at large.

They evaluate and assess each critical business decision or choice from the point of view of
diverse stakeholder interest, driven by the need to minimize risk and to pro-actively address
long-term social, economic and environmental costs and concerns. For them, being socially
responsible is not an occasional act of charity or that one-time token financial contribution to
the local school, hospital or environmental NGO. It is an ongoing year-round commitment,
which is integrated into the very core of their business objectives and strategy.

Because we believe that there is no contradiction between doing well and doing right. Indeed, doing
right is a necessary condition for doing well.
 GROWTH OF RELIANCE MUTUAL FUND THROUGH
RECOGNITION

Growth through Recognition

Reliance has merited a series of awards and recognitions for excellence for businesses and
operations.

Corporate Ranking and Ratings:

Reliance featured in the Fortune Global 500 list of ‘World’s Largest Corporations’ for the
fourth consecutive year.

 Ranked 269th in 2007 having moved up 73 places from the previous year.

 Featured as one of the world’s Top 200 companies in terms of Profits.

 Among the top 25 climbers for two years in a row.

 Featured among top 50 companies with the biggest increase in Revenues.

 Ranked 26th within the refining industry.

Reliance is ranked 182nd in the FT Global 500 (up from previous year’s 284th rank).

 PetroFed, an apex hydrocarbon industry association, conferred the PetroFed 2007 awards in
the categories of “Refinery of the Year” and “Exploration & Production - Company of the
Year”.

 Brand Reliance was conferred the “Bronze Award” at The Buzziest Brands Awards 2008,
organized by agencyfaqs!

 Institute of Economic Studies conferred the “Udyog Ratna” award in October 2007 for
contributions to the industry.
  Chemtech Foundation conferred the “Hall of Fame” in February 2008 for sterling
contributions to the industry.

 Chemtech Foundation conferred the “Outstanding Achievement - Oil Refining” for work at
the Jamnagar Manufacturing Division.

Petroleum Federation of India conferred the “Refinery of the Year Award - 2007” to Jamnagar
Manufacturing Division

 “The Plastics Export Promotion Council - PLEXCOUNCIL Export Award” in the category of
Plastic Polymers for the year 2006-2007 was awarded to Reliance being the largest exporter
in this category.

AWARDS OF THE COMPANY-

1. Reliance Capital Asset Management Ltd. won the Asia Asset Management Award 2007

2. Reliance Capital Asset Management Ltd. won the Social & Corporate Governance Award 2007

3. Reliance Mutual Fund has been awarded the "NDTV Business Leadership Award 2007" in the
Mutual Fund category.

4. CNBC TV18 - CRISIL Mutual Fund of the Year Award for 2007