Invesco India Arbitrage Fund

Transcription

1 Key Information Memorandum Cum Appication Form Invesco India Arbitrage Fund (An Open-ended Equity Scheme) Suitabe for investors who are seeking* income over medium-term income through opportunities emerging out of mis-pricing between cash and derivatives markets and through depoyment of surpus cash in fixed income instruments RISKOMETER *Investors shoud consut their financia advisers if in doubt about whether the product is suitabe for them Investors understand that their principa wi be at moderatey ow risk Continuous Offer for Units at NAV based prices This Key Information Memorandum (KIM) sets forth the information, which a prospective investor ought to know before investing. For further detais of the Scheme/Mutua Fund, due diigence certificate by the AMC, Key Personne, investors rights & services, risk factors, penaties & pending itigations etc. investors shoud, before investment, refer to the Scheme Information Document and Statement of Additiona Information avaiabe free of cost at any of the Investor Service Centres or distributors or from the website www. invescomutuafund.com. The Scheme particuars have been prepared in accordance with Securities and Exchange Board of India (Mutua Funds) Reguations, 1996, as amended ti date, and fied with Securities and Exchange Board of India (SEBI). The units being offered for pubic subscription have not been approved or disapproved by SEBI, nor has SEBI certified the accuracy or adequacy of this KIM. This KIM is dated Apri 28, SPONSOR Invesco Hong Kong Limited, 41/F, Champion Tower, 3 Garden Road, Centra, Hong Kong. INVESTMENT MANAGER Invesco Asset Management (India) Private Limited 2101 A, 21st Foor, A Wing, Marathon Futurex, N. M. Joshi Marg, Lower Pare, Mumbai TRUSTEE Invesco Trustee Private Limited 2101 A, 21st Foor, A Wing, Marathon Futurex, N. M. Joshi Marg, Lower Pare, Mumbai MUTUAL FUND Invesco Mutua Fund, 2101 A, 21st Foor, A Wing, Marathon Futurex, N. M. Joshi Marg, Lower Pare, Mumbai

2 Invesco India Arbitrage Fund (An Open - ended Equity Scheme) Investment Objective Asset Aocation Pattern of the Scheme Investment Strategy of the Scheme Risk Profie of the Scheme To generate income through arbitrage opportunities emerging out of mis-pricing between the cash market and the derivatives market and through depoyment of surpus cash in fixed income instruments. However, there is no assurance or guarantee that the investment objective of the Scheme wi be achieved. The Scheme does not assure or guarantee any returns. Type of Instruments Norma Aocation (% of Net Assets) Minimum Maximum Equity and Equity reated instruments *Equity Derivatives incuding stock futures and stock options# Money Market Instruments/Debt instruments** and Fixed Income Derivatives *The exposure to derivative shown in the above asset aocation tabe is the exposure taken against the underying equity investments and shoud not be considered for cacuating the tota asset aocation. The idea is not to take additiona asset aocation with the use of derivatives. # The notiona vaue exposure in derivatives securities woud be reckoned for the purposes of the specified imits, the margin money depoyed on these positions woud be incuded in the Money Market category. The maximum derivative position wi not exceed 80% of the portfoio (i.e. net assets incuding cash). The cumuative gross exposure through equity, debt and derivative positions sha not exceed 100% of the net assets of the scheme The maximum fixed income derivative position wi not exceed 35% of the portfoio (i.e. net assets incuding cash). **Incuding securitized debt (excuding foreign securitized debt) upto 30% of net assets of the scheme. The fund manager woud identify arbitrage opportunities and execute the deas simutaneousy in both the markets. In terms of the SEBI guideines, the Scheme sha not short se in the cash market at a times. The debt component of the Scheme woud be invested in debt securities and money market instruments. The duration of the debt portfoio woud primariy be managed with a view to generate income with minimum interest rate risk. Mutua Fund Units invove investment risks incuding the possibe oss of principa. Pease read the SID carefuy for detais on risk factors before investment. Scheme specific Risk Factors are summarized beow: Scheme Specific Risk Factor The primary objective of the Scheme is to identify investment opportunities and to expoit price discrepancies in various markets. Identification and expoitation of the strategies to be pursued by the fund manager invove uncertainty. No assurance can be given that fund manager wi be abe to ocate investment opportunities or to correcty expoit price discrepancies in the capita markets. Reduction in mis-pricing opportunities between the cash market and future and options market may ead to ower eve of activity affecting the returns. As the Scheme proposes to execute arbitrage transactions in various markets simutaneousy, this may resut in high portfoio turnover and consequenty high transaction cost. Risks associated with investing in Equity & Equity Reated Instruments: Equity and equity reated instruments by nature are voatie and prone to price fuctuations on a daiy basis due to macro and micro economic factors. The vaue of equity and equity reated Instruments may fuctuate due to factors affecting the securities markets such as voume and voatiity in the capita markets, interest rates, currency exchange rates, changes in aw/poicies of the Government, taxation aws, poitica, economic factors, genera decine in the Indian markets or other deveopments, which may have an adverse impact on individua securities, a specific sector or a sectors. Consequenty, the NAV of the Units issued under the Scheme may be adversey affected. Further, the Equity and Equity Reated Instruments are risk capita and are subordinate in the right of payment to other securities, incuding debt securities. Equity and Equity Reated Instruments isted on the stock exchange carry ower iquidity risk, however the Scheme s abiity to se these investments is imited by the overa trading voume on the stock exchanges. In certain cases, settement periods may be extended significanty by unforeseen circumstances. The inabiity of the Scheme to make intended securities purchases due to settement probems coud cause the Scheme to miss certain investment opportunities. Simiary, the inabiity to se securities hed in the Scheme s portfoio may resut, at times, in potentia osses to the Scheme, shoud there be a subsequent decine in the vaue of securities hed in the Scheme s portfoio. Further, the voatiity of medium/ sma - capitaization stocks may be higher in comparison to iquid arge capitaisation stocks. The securities which are not isted on the stock exchange are inherenty iiquid in nature and carry a higher amount of iquidity risk, in comparison to securities that are isted on the stock exchanges or offer other exit options to the investor, incuding put option. The iquidity and vauation of the Scheme s investments due to its hodings of unisted securities may be affected if they have to be sod prior to the target date of disinvestment. Risks associated with investing in Fixed Income & Money Market Instruments In addition to the factors that affect vaue of securities, the NAV of the Units of the Scheme wi fuctuate with the movement in the broader fixed income, money market and derivatives market and may be infuenced by factors infuencing such markets in genera incuding but not imited to economic conditions, changes in interest rates, price and voume voatiity in fixed income markets, changes in tax aws, currency exchange rates, foreign investments, poitica, economic or other deveopments. Further, the investments made by the Scheme wi aso be affected by interest rate / price risk, credit risk or defaut risk, iquidity risk, reinvestment risk, settement risk, risk associated with investments in derivatives. Risks associated with investing in Derivatives The risks associated with the use of derivatives are different from or possiby greater than, the risks associated with investing directy in securities and other traditiona investments. Derivative products are everaged instruments and can provide disproportionate gains as we as disproportionate osses to the investor. Other risks incude risk of mispricing or improper vauation and the inabiity of the derivative to correate perfecty with underying assets, rates and indices, iiquidity risk whereby the Scheme may not be abe to se or purchase derivative quicky enough at a fair price. Risks associated with Securitised Debt Risk associated with investing in securitised debt invove interest rate risk, prepayment risk, credit or defaut risks. Further, Asset Backed Security has structure risk due to a unique characteristic known as eary amortization or eary payout risk. Risks associated with Securities Lending For Equity Instruments: As with other modes of extensions of credit, there are risks inherent to securities ending. During the period the security is ent, the Scheme may not be abe to se such security and in turn cannot protect from the faing market price of the said security. Under the current securities ending and borrowing mechanism, the Scheme can ca back the securities ent any time before the maturity date of securities ending contract. However this wi be again the function of iquidity in the market and if there are no enders in the specified security, the Scheme may not be abe to ca back the security and in the process, the Scheme wi be exposed to price voatiity. Moreover, the fees paid for caing back the security may be more than the ending fees earned by Scheme at the time of ending the said security and this coud resut in oss to the Scheme. Aso, during the period the security is ent, the Fund wi not be abe to exercise the voting rights attached to the security as the security wi not be registered in the name of the Scheme in the records of the Depository/ issuer. 2 Key Information Memorandum & Appication Form

3 Pans and Options For Debt Instruments: As with other modes of extensions of credit, there are risks inherent to securities ending, incuding the risk of faiure of the other party, in this case the approved intermediary, to compy with the terms of the agreement entered into between the ender of securities i.e. the Scheme and the approved intermediary. Such faiure can resut in the possibe oss of rights to the coatera put up by the borrower of the securities, the inabiity of the approved intermediary to return the securities deposited by the ender and the possibe oss of any corporate benefits accruing to the ender from the securities deposited with the approved intermediary. The Fund may not be abe to se such ent securities and this can ead to temporary iiquidity. Risks associated with Short Seing The Scheme may enter into short seing transactions, subject to SEBI and RBI Reguations. Short positions carry the risk of osing money and these osses may grow unimited theoreticay if the price of the stock increases without any imit. This may resut in major oss to the Scheme. At times, the participants may not be abe to cover their short positions, if the price increases substantiay. If numbers of short seers try to cover their position simutaneousy, it may ead to disordery trading in the stock and thereby can brisky escaate the price even further making it difficut or impossibe to iquidate short position quicky at reasonabe prices. In additions, short seing aso carries the risk of inabiity to borrow the security by the participants thereby requiring the participants to purchase the securities sod short to cover the position even at unreasonabe prices. Requirement of minimum investors in the Scheme The Scheme sha have a minimum of 20 investors and no singe investor sha account for more than 25% of the corpus of the Scheme. In case the Scheme does not have a minimum of 20 investors in the stipuated period, the provisions of Reguation 39(2)(c) of the SEBI (MF) Reguations woud become appicabe automaticay without any reference from SEBI and accordingy the Scheme sha be wound up and the units woud be redeemed at appicabe NAV. The two conditions mentioned above sha aso be compied within each subsequent caendar quarter thereafter, on an average basis, as specified by SEBI. If there is a breach of the 25% imit by any investor over the quarter, a rebaancing period of one month woud be aowed and thereafter the investor who is in breach of the rue sha be given 15 days notice to redeem his exposure over the 25% imit. Faiure on the part of the said investor to redeem his exposure over the 25% imit within the aforesaid 15 days woud ead to automatic redemption by the Mutua Fund on the appicabe Net Asset Vaue on the 15th day of the notice period. The Fund sha adhere to the requirements prescribed by SEBI from time to time in this regard. Risk Mitigation Measures: Type of Risk Risk Mitigation Measures Scheme Specific Risk This investment strategy attempts to profit from the Cost of Carry between the cash markets and futures market. The Cost of Carry tracks short term interest rates and therefore, whie the rate of return wi vary, we expect that there wi aways be opportunities that can be expoited Voatiity Risk Concentration Risk By monitoring sector / company exposure at portfoio eve. By diversifying across stocks / sectors, concentration risk can be reduced. The fund manager wi endeavor to buid we diversified portfoios within the overa fund specific investment strategy, which wi hep in controing concentration risk. Liquidity Risk The fund manager wi contro the iquidity at portfoio construction eve The Scheme offers a separate Pan for investments directy with the Fund (i.e. appication not routed through Distributor). Thus, the Scheme offers two Pans as foows: Invesco India Arbitrage Fund Invesco India Arbitrage Fund - Direct Pan Each of the above Pans under the Scheme offers foowing options: Options Faciity Growth Ni Dividend Reinvestment / Payout Direct Pan wi have a ower expense ratio excuding distribution expenses, commission for distribution of Units etc. Direct Pan is ony for investors who purchase /subscribe Units directy with the Fund (i.e. appication not routed through Distributor). Investments under Direct Pan can be made through various modes offered by the Fund for investing directy with the Fund (except Stock Exchange Patform(s) and a other Patform(s) where investors appications for subscription of units are routed through Distributors.) The portfoio of Direct Pan wi form part of portfoio of the Scheme and there wi be no separate portfoio for Direct Pan. Further, both the options i.e. Growth and Dividend wi have common portfoio under the Scheme. If dividend payabe under Dividend Payout option is equa to or ess than Rs. 500/- then the dividend woud be compusoriy reinvested. Defaut Pan/Option If no option is specified at the time of appication, the defaut option is Growth. If no faciity is specified, defaut faciity is Dividend Reinvestment. Investors subscribing Units under Direct Pan of a Scheme shoud indicate Direct Pan against the Scheme name in the appication form. Investors shoud aso mention Direct in the ARN coumn of the appication form. The tabe showing various scenarios for treatment of appication under Direct / Existing Pan is as foows: Scenario Broker Code mentioned by the investor Pan mentioned by the investor Defaut Pan to be captured 1 Not mentioned Not mentioned Direct 2 Not mentioned Direct Direct 3 Not mentioned Existing Direct 4 Mentioned Direct Direct 5 Direct Not Mentioned Direct 6 Direct Existing Direct 7 Mentioned Existing Existing 8 Mentioned Not Mentioned Existing In cases of wrong/ invaid/ incompete ARN code mentioned on the appication form, the appication wi be processed under Existing Pan. The AMC sha contact and obtain the correct ARN code within 30 caendar days of the receipt of appication form from the investor/ distributor. In case, the correct code is not received within 30 caendar days, the AMC sha reprocess the transaction under Direct Pan from the date of appication without any exit oad, if appicabe. Key Information Memorandum & Appication Form 3

4 Appicabe NAV Minimum Appication and Redemption Amount / Number of Units Despatch of Repurchase (Redemption) Request Benchmark Index Dividend Poicy Name of the Fund Manager Name of the Trustee Company Where Units under a Scheme are hed under both Existing and Direct Pans and the redemption /switch request pertains to the Direct Pan, the same must ceary be mentioned on the request (aong with the foio number) & faiing which the request woud be processed from the Existing Pan. However, where Units under the requested Option are hed ony under one Pan, the request woud be processed under such Pan. For Subscriptions / Purchases / Switch- ins for amount ess than Rs. 2 Lakh: In respect of vaid appications received upto 3.00 p.m. on a Business Day by the Fund aong with a oca cheque or a demand draft payabe at par at the Officia Points of Acceptance where the appication is received, the cosing NAV of the day on which appication is received sha be appicabe. In respect of vaid appications received after 3.00 p.m. on a Business Day by the Fund aong with a oca cheque or a demand draft payabe at par at the Officia Points of Acceptance where the appication is received, the cosing NAV of the next Business day sha be appicabe. In respect of vaid appications with an outstation cheque or demand draft not payabe at par at the Officia Points of Acceptance where the appication is received, the cosing NAV of day on which the cheque or demand draft is credited sha be appicabe. For Subscriptions / Purchases / Switch- ins for amount equa to or more than Rs. 2 Lakh: In respect of vaid appication received upto 3.00 p.m. on a Business Day at the Officia Points of Acceptance and funds for the entire amount of subscription/purchase as per the appication/switch-in request are avaiabe for utiization by the scheme before the cut off time i.e. funds are credited to the bank account of the Scheme before the cut off time, the cosing NAV of day on which appication is received sha be appicabe. In respect of vaid appication received after 3.00 p.m. on a Business Day at the Officia Points of Acceptance and funds for the entire amount of subscription/purchase as per the appication/switch-in request are avaiabe for utiization by the scheme after the cut off time on the same day i.e. the funds are credited to the bank account of the Scheme after cut off time on the same day, the cosing NAV of next Business Day sha be appicabe. Irrespective of the time of receipt of appication at the Officia Point of Acceptance, where funds for the entire amount of subscription/purchase as per the appication/switch-in request are avaiabe for utiization before the cut off time of any subsequent Business Day i.e. funds are credited to the bank account of the Scheme before the cut off time of any subsequent Business Day, the cosing NAV of such Business Day on which the funds are avaiabe for utiization by the Scheme sha be appicabe. i. It is carified that in case where more than one appication is received for purchase / subscription in the Scheme (irrespective of the pan/option/ sub-option) of the Fund for an aggregate investment amount equa to or more than Rs. 2 Lakh on any business day (as per time stamping rue), then such appications sha be aggregated at Permanent Account Number (PAN) eve of the investor / unit hoder. In case of joint hoding, transactions with simiar hoding structures wi be aggregated simiar to the principe appied for compiation of Consoidated Account Statements (CAS). Further the transactions wi be aggregated where investor hoding pattern is same irrespective of whether the amount of the individua transaction is above or beow Rs. 2 Lakh. ii. For the purpose of aggregation of transactions Switches, Systematic Investment Pan, Systematic Transfer Pan, other triggered transactions wi be excuded. Further, transactions in the name of minor received through guardian wi not be aggregated with the transaction in the name of same guardian. iii. Such aggregation sha be done irrespective of the number of foios under which the investor is investing and irrespective of source of funds, mode of payment, ocation and time of appication. iv. Accordingy, the appicabe NAV for such transaction wi be of the day on which funds are avaiabe for utiization before the cut off time in case of each appication. v. In case funds are received on separate days and are avaiabe for utiization on different Business Days before the cut off time, the appicabe NAV sha be of the Business Days on which the ceared funds are avaiabe for utiization for the respective appication amount. For Redemption / Switches: Vaid redemption appication received upto 3.00 p.m. on a Business Day, the same day s cosing NAV wi be appicabe. Vaid redemption appication received after 3.00 p.m. on a Business Day, the cosing NAV of the next Business Day wi be appicabe. Vaid appication for switch out sha be treated as appication for redemption and the provisions of cut off time and appicabe NAV sha be appied accordingy. For Lumpsum Purchase Purchase Switch-in Additiona Purchase Redemption* Rs. 5,000/- per appication and in mutipes of Re.1/- thereafter. Rs. 5,000/- per appication and in mutipes of Re. 0.01/- thereafter. Rs. 1,000/- per appication and in mutipes of Re.1/- thereafter. Amount for switch-in: Rs. 1,000/- per appication and in mutipes of Re. 0.01/- thereafter. Rs. 1,000/- or 100 units or account baance, whichever is ower. *Where Units under a Scheme are hed under both Existing and Direct Pans and the redemption /switch request pertains to the Direct Pan, the same must ceary be mentioned on the request (aong with the foio number) faiing which the request woud be processed from the Existing Pan. However, where Units under the requested Option are hed ony under one Pan, the request woud be processed under such Pan. For Systematic Investment Pan Monthy frequency Quartery frequency Rs. 500/- per month and in mutipes of Re. 1 thereafter Rs. 1,500/- per quarter and in mutipes of Re. 1 thereafter Within 10 working days of the receipt of the redemption request at the officia points of acceptance of Invesco Mutua Fund. Crisi Liquid Fund Index Under the Dividend Option, the Trustees may decare the dividend subject to avaiabiity of distributabe surpus cacuated in accordance with SEBI (Mutua Funds) Reguations, The actua decaration of dividend and frequency wi, inter-aia, depend on avaiabiity of distributabe surpus cacuated in accordance with SEBI (Mutua Funds) Reguations, 1996 and the decision of the Trustees sha be fina in this regard. Dividends, if decared, wi be paid (subject to deduction of tax at source, if any) to those Unithoders whose names appear in the register of Unithoders on the notified record date. There is no assurance or guarantee to the Unithoders as to the rate of dividend nor that the dividend wi be paid reguary. If dividend payabe under Dividend Payout option of the Scheme is equa to or ess than Rs. 500/- then the dividend woud be compusoriy reinvested in the option of the Scheme. With regard to Unithoders who have opted for Dividend Reinvestment faciity, the dividend due wi be reinvested by aotting units for the dividend amount at a price based on the prevaiing ex-dividend NAV per unit on the record date. The AMC sha dispatch to the Unithoders, the dividend warrants within 30 days of the date of decaration of dividend. Mr. Pranav Gokhae Tenure for which Fund Manager has been managing the Scheme: 6.2 years Invesco Trustee Private Limited 4 Key Information Memorandum & Appication Form

5 Performance of the scheme (as on March 31, 2017) Invesco India Arbitrage Fund (IIAF) Particuars Since Year Years Years Inception Invesco India Arbitrage Fund 6.19% 7.22% 7.73% 7.31% - Growth Crisi Liquid Fund Index 7.11% 8.04% 8.36% 7.59% Absoute Returns for ast 5 financia years Invesco India Arbitrage Fund - Direct Pan (IIAF - DP) Particuars 1 Year 3 Years Since Inception Invesco India Arbitrage Fund 6.79% 7.79% 8.08% - Direct Pan - Growth Crisi Liquid Fund Index 7.11% 8.04% 8.38% Absoute Returns for ast 5 financia years Expenses of the Scheme (i) Load Structure 10.00% 9.00% 8.00% 7.00% 6.00% 5.00% 4.00% 3.00% 2.00% 1.00% 0.00% 9.37% 8.17% % 9.46% Arbitrage Fund 8.64% 8.98% 6.83% 8.04% CRISIL Liquid Fund Index 6.19% 7.11% Past performance may or may not be sustained in future. Returns for 1 year are absoute. Returns > 1 year are compounded annuaized returns (CAGR) & inception date is deemed to be date of aotment. Date of aotment : IIAF : Apri 30, 2007; IIAF - DP : January 01, to Different Pans have different expense structure. Entry Load: Ni In terms of SEBI Circuar No. SEBI/IMD/CIR No. 4/168230/09 dated June 30, 2009, no entry oad wi be charged on purchase / additiona purchase/ switch-in. The upfront commission, if any, on investment made by the investor sha be paid by the investor directy to the Distributor, based on his assessment of various factors incuding the service rendered by the Distributor. Exit Load: In respect of each purchase / switch-in of units, an Exit Load of 0.50% is payabe if units are redeemed / switched-out on or before 15 days from the date of aotment. In respect of each purchase / switch-in of units, no Exit Load is payabe if units are redeemed / switched-out after 15 days from the date of aotment. No Entry/Exit Load wi be evied on Units issued on dividend reinvested. Switch between the Pans under the Scheme: For Switch to Direct Pan : Transaction not routed through Distributor: : Ni Transaction routed through Distributor: Appicabe exit oad. For Switch from Direct Pan : Ni However, if the Unit hoder redeems /switches-out such switched units from existing pan before competing specified exit oad period from the date of origina purchase, appicabe exit oad wi be charged. Exit oad charged, if any, wi be credited back to the Scheme, net of service tax. The AMC reserves the right to change/modify the oad structure from a prospective date % 9.00% 8.00% 7.00% 6.00% 5.00% 4.00% 3.00% 2.00% 1.00% 0.00% 2.42% 1.88% 9.46% 8.36% Arbitrage Fund - Direct Pan 9.23% 8.98% % 8.04% Crisi Liquid Fund Index 6.79% 7.11% (ii) Recurring expenses Daiy Net Assets First Rs. 100 Crores Next Rs. 300 Crores Next Rs. 300 Crores Baance Maximum as a % of daiy net assets 2.50% 2.25% 2.00% 1.75% Annua Scheme Recurring Expenses charged to Direct Pan wi be restricted upto 1.80% of daiy net assets. Commission and distribution expenses wi not be charged to the Direct Pan. The Tota Recurring Expenses charged to Direct Pan wi be ower by at east 28.00% vis-à-vis Existing Pan. Actua expenses for the previous financia year ended March 31, 2017 (unaudited): 0.69% (Incudes Tota Expense Ratio permissibe under reguation 52 (6) (c), Additiona expenses under Reguations 52(6A)(c) and Additiona expenses for gross new infows from specified cities under reguation 52 (6A) (b)). Fungibiity of expenses: The expenses towards Investment Management and Advisory Fees under Reguation 52 (2) and the various sub-heads of recurring expenses mentioned under Reguation 52 (4) of SEBI (MF) Reguations are fungibe in nature. Thus, there sha be no interna sub-imits within the expense ratio for expense heads mentioned under Reguation 52 (2) and (4) respectivey. Further, the additiona expenses under Reguation 52(6A) (c) may be incurred either towards investment & advisory fees and/or towards other expense heads as stated in SID of the Scheme. In addition to Tota Expense Ratio (TER) within the imits specified under reguation 52 (6) of the Reguations, the AMC may charge expenses not exceeding 0.20% of daiy net assets of the Scheme, towards investment & advisory fees as specified under reguation 52(2) of the Reguations and/or towards recurring expenses as specified under 52(4) of the Reguations. Note: Of the above expense 0.02% on daiy net assets wi be set aside for investor education and awareness initiatives. Service tax on other expenses (incuding on brokerage & transaction cost, if any) wi be borne by the Scheme within above imit. However, service tax on investment and advisory fees wi be in addition to maximum imit as mentioned above. Additiona Distribution Expenses in case of new infows from specified cities: Expenses not exceeding 0.30% of daiy net assets of the Scheme wi be charged towards additiona distribution expenses if new infows from beyond top 15 cities, as specified by SEBI from time to time, are at east: (a) 30% of gross new infows in the Scheme or (b) 15% of the average assets under management (year to date) of the Scheme, whichever is higher. In case, infows from beyond top 15 cities is ess than the higher of (a) or (b) above, additiona expenses sha be charged to Scheme on proportionate basis in accordance with SEBI Circuar vide reference no. CIR/IMD/DF/21/2012 dated September 13, The additiona expenses on account of infows from such cities charged wi be credited back to the Scheme in case the said infows are redeemed within a period of one year from the date of investment. Brokerage and Transaction Cost: In addition to imits specified in reguation 52 (6) of the Reguations, brokerage and transaction costs incurred for the purpose of execution of trade wi be capitaized to the extent of 0.12% of vaue of trade in case of cash market transaction and 0.05% of vaue of trade in case of derivative transactions (incusive of service tax). Any payment towards brokerage and transaction cost for execution of trade over and above the said imit of 0.12% for cash market transactions and 0.05% for derivatives transactions may be charged to the Scheme within the maximum imit of Tota Expense Ratio ( TER ) as prescribed under reguation 52 of the Reguations. The tota expenses of the Scheme incuding the Investment Management and Advisory Fee sha not exceed the imits stated in Reguation 52 of the SEBI (MF) Reguations. Key Information Memorandum & Appication Form 5

6 Transaction Charges Waiver of Load for Direct Appications Tax treatment for the Investors (Unit hoders) Daiy Net Asset Vaue (NAV) Pubication For Investor Grievances pease contact Unit hoders Information Any expenditure in excess of the prescribed imit (incuding brokerage and transaction cost, if any) wi be borne by the AMC/the Trustee/Sponsor. The Fund wi update the current expense ratios on its website ( ) within two working days mentioning the effective date of change. In terms of SEBI circuar no. IMD/ DF/ 13/ 2011 dated August 22, 2011, a transaction charge, as foows, is payabe to distributors who have opted to receive transaction charge*: i. For existing investor in a Mutua Fund: Rs.100/- per subscription of Rs.10,000/- and above. ii. For first time investor in Mutua Funds: Rs.150/- per subscription of Rs.10,000/- and above *Distributors sha aso have the option to either opt in or opt out of evying transaction charge based on type of the product. In case of investment through Systematic Investment Pan (SIPs), the transaction charge sha be appicabe ony if the tota commitment through SIP (i.e. amount of each SIP instament X tota number of SIP instaments) amounts to Rs. 10,000/- and above. In such cases, the transaction charge sha be recovered in 3-4 instaments, as may be decided by the AMC. However, there wi be no transaction charge on: i. Subscription of ess than Rs. 10,000/-; or ii. Transactions other than purchases / subscriptions reating to new infows; or iii. Direct subscription (subscription not routed through distributor); or iv. Subscription routed through distributor who has chosen to Opt-out of charging of transaction charge; or v. Transaction routed through Stock Exchange(s). The transaction charge, if any, wi be deducted by the AMC from subscription amount and sha be paid to distributor. The baance subscription amount, after deducting appicabe transaction charges, wi be invested. It is carified that upfront commission to distributor wi continue to be paid by the investor directy to distributor by a separate cheque. Not Appicabe Investors are advised to refer to the detais in the Statement of Additiona Information and aso independenty refer to their tax advisor. The Direct Pan under the Scheme wi have a separate NAV. The NAV wi be decared on a the Business Days and wi be pubished at east in two daiy newspapers having circuation a over India. NAV can aso be viewed on and Investors can aso ca at Registrar & Transfer Agents Karvy Computershare Pvt. Ltd. Unit: Invesco Mutua Fund, Karvy Seenium Tower B, Pot No. 31 & 32 Gachibowi, Financia District, Nanakramguda, Seriingampay Hyderabad Te No.: /23 Emai: mfservices@invesco.com Mr. Surinder Singh Negi Invesco Asset Management (India) Pvt. Ltd A, 21st Foor, A Wing, Marathon Futurex, N. M. Joshi Marg, Lower Pare, Mumbai Te. No.: Fax No.: E-mai : mfservices@invesco.com Accounts Statement: For Unithoders not having a demat account On acceptance of appication for subscription, an aotment confirmation specifying the number of Units aotted wi be sent by way of e-mai and/or SMS to the appicant s registered e-mai address and/or mobie number within five Business Days from the date of receipt of transaction request from the unit hoder(s). Thereafter, unit hoder in whose foio(s) transaction(s) has taken pace, Consoidated Account Statement (CAS)^ for the caendar month, wi be sent on or before 10th day of the succeeding month. ^ A Consoidated Account Statement (CAS) sha contain detais of a the transactions 1 during the month, the tota purchase vaue / cost of investment in each scheme and hoding at the end of the month across a schemes of a mutua funds incuding transaction charges paid to the distributor. * the word transaction sha incude purchase, redemption, switch, dividend payout, dividend reinvestment, systematic investment pan, systematic withdrawa pan and systematic transfer pan. For the purpose of sending CAS, common investor across mutua funds sha be identified by their Permanent Account Number (PAN). In case the foio has more than one registered hoder, the first named Unit hoder wi receive CAS/account statements. Further, the CAS detaiing hoding across a schemes of a mutua funds at the end of every six months (i.e. September/ March), sha be sent by mai/emai on or before 10th day of succeeding month to a such Unit hoders in whose foios no transaction has taken pace during that period. The haf yeary consoidated account statement wi be sent by e-mai to the Unit hoders whose e-mai address is avaiabe, uness a specific request is made to receive in physica. In case of specific request received from investors, Mutua Funds sha provide the account statement to the investors within 5 business days from the receipt of such request without any charges. The AMC sha send first account statement for a new foio separatey with a detais registered in the foio by way of a physica account statement and/or an e-mai to the investor s registered address / e-mai address not ater than five business days from the date of receipt of subscription request from the unit hoder. For foios not incuded in the Consoidated Account Statement ( CAS ), the AMC sha send account statement by mai/e-mai to the investors on a monthy basis, pursuant to any financia transaction in such foios on or before tenth day of succeeding month. Further, the Account Statements detaiing hoding across a schemes of Invesco Mutua Fund at the end of every six months (i.e. September/ March), sha be sent by mai/e-mai on or before 10th day of succeeding month, to a such Unit hoders in whose foios no transaction has taken pace during that period. For Unithoder(s) hoding units in Account Statement mode (Physica) but having a Demat account a) Who have opted to receive CAS through Depositories On acceptance of appication for subscription, an aotment confirmation specifying the number of Units aotted wi be sent by way of e-mai and/ or SMS to the appicant s registered e-mai address and/or mobie number within five Business Days from the date of receipt of transaction request from the unit hoder(s). Thereafter a CAS wi be dispatched by Depositories within 10 Days from the end of the month for Permanent Account Numbers (PANs) which are common between Depositories & the AMC and in which transaction* has taken pace during the month. In case of mutipe hoding, PAN of the first hoder and pattern of hoding wi be considered for dispatching CAS. If the statements are presenty being dispatched by e-mai either by the Fund or the Depositories then CAS wi be sent through emai. However the Unit hoder wi have an option to receive CAS in physica form at the address registered in the Depository system. In case there is no transaction in any of the mutua fund foios and demat accounts then CAS with hoding detais wi be sent to the Unit hoders on haf yeary basis. The dispatch of CAS by Depositories to Beneficia Owners woud constitute compiance by the AMC / the Fund with the requirements under Reguation 36(4) of SEBI (Mutua Funds) Reguations Key Information Memorandum & Appication Form

7 The AMC sha send first account statement for a new foio separatey with a detais registered in the foio by way of a physica account statement and/or an e-mai to the investor s registered address / e-mai address not ater than five business days from the date of receipt of subscription request from the unit hoder. In case of demat accounts with ni baance and no transactions in securities and in mutua fund foios, the Depositories sha send account statement in terms of reguations appicabe to the Depositories. *the word transaction sha incude transaction in demat accounts of the investor or in any of his mutua fund foios. b) Who have opted not to receive CAS through Depositories Unithoder(s) wi have an option not to receive CAS through Depositories. Such Unithoder(s) wi be required to provide negative consent to the Depositories. Unithoder(s) who have opted not to receive CAS through Depositories wi continue to receive CAS from the AMC / the Fund. Further, CAS issues for the haf-year (ended September/March) sha aso provide: The amount of actua commission paid by AMC/Mutua Fund (MF) to distributors (in absoute terms) during the haf-year period against the concerned investor s tota investments in each MF scheme. The term commission here refers to a direct monetary payments and other payments made in the form of gifts / rewards, trips, event sponsorship etc. by AMC/MF to distributors. Further, a mention may be made in such CAS indicating that the commission discosed is gross commission and does not excude costs incurred by distributors such as service tax (wherever appicabe, as per existing rates), operating expenses, etc. The scheme s average Tota Expense Ratio (in percentage terms) for the haf-year period for each scheme s appicabe pan (reguar or direct or both) where the concerned investor has actuay invested in. Such haf-yeary CAS sha be issued to a MF investors, excuding those investors who do not have any hodings in MF schemes and where no commission against their investment has been paid to distributors, during the concerned haf-year period. For Demat Account Hoders Unit hoder who has opted to hod units in eectronic (demat) mode wi receive a confirmation specifying the number of units aotted by way of e-mai and/ or SMS to the appicant s registered e-mai address and/or mobie number within five business days from the date of receipt transaction request from the unit hoders. Further, such Unit hoder wi receive hoding/transaction statements directy from his depository participant at such a frequency as may be defined in the Depositories Act, 1996 or reguations made there under or on specific request. Investors whose foio(s)/demat account(s) are not updated with PAN sha not receive CAS. Investors are therefore requested to ensure that their foio(s)/ demat account(s) are updated with PAN. Discosures: The Mutua Fund sha pubish a compete statement of the Scheme portfoio, within one month from the cose of each haf year (i.e. 31st March and 30th September), by way of an advertisement at east, in one nationa Engish daiy and one regiona newspaper in the anguage of the region where the head office of the mutua fund is ocated. The Mutua Fund may opt to send the portfoio to a Unit hoders in ieu of the advertisement (if appicabe). The haf yeary portfoio statement wi aso be dispayed on the website of the Mutua Fund and AMFI. The Mutua Fund / the AMC sha discose portfoio (aong with ISIN) as on the ast day of the month for a its schemes on website of Mutua Fund (www. invescomutuafund.com) on or before the tenth day of the succeeding month in a user-friendy and downoadabe format (preferaby in a spreadsheet). Further, the Mutua Fund and Asset Management Company sha within one month from the cose of each haf year (i.e. on 31st March and on 30th September) host a soft copy of the unaudited financia resuts of the Scheme on the website of the Mutua Fund. Aso an advertisement discosing the hosting of the unaudited financia resuts of the Scheme on the website wi be pubished in ateast one Engish daiy newspaper having nationwide circuation and in a newspaper having wide circuation pubished in anguage of the region where the Head Office of the Mutua Fund is situated. Annua Financia Resuts: The scheme wise annua report or an abridged summary thereof sha be maied/e-maied to a Unit hoders not ater than four months (or such other period as may be specified by SEBI from time to time) from the date of cosure of the reevant accounting year (i.e. 31st March each year). In case of Unit hoders who have provided their e-mai address, annua report or an abridged summary thereof wi be sent in eectronic form ony to their registered e-mai address and not as physica copies. The investors whose e-mai address are not avaiabe with the Fund, the AMC wi continue to send physica copies of scheme annua report or abridged summary. Fu annua report / abridged summary thereof sha aso be avaiabe for inspection at the Head Office of the Mutua Fund. The Unit hoder may request for a physica copy of annua report or abridged summary thereof by writing to the Asset Management Company/Registrar & Transfer Agents. Scheme wise annua report and abridged summary thereof sha aso be paced on the website of the Mutua Fund ( and Association of Mutua Funds in India ( and ink for the same wi be dispayed prominenty on the website of the Mutua Fund ( Discosures as per SEBI circuar dated March 18, 2016 are as foows: Scheme s Portfoio Hoding (As on March 31, 2017) Top 10 hodings by issuer Fund aocation towards various sectors Name of issuer % of Net Assets Sector % of Net Assets Invesco Mutua Fund 13.34% Financia Services 45.52% IndusInd Bank Limited 8.56% Others 13.77% IDFC Limited 8.53% Energy 9.28% RBL Bank Limited 7.41% IT 6.93% PTC India Financia Services Limited 6.11% Consumer Goods 6.45% Tata Goba Beverages Limited 4.45% Construction 4.61% The Karnataka Bank Limited 4.38% Pharma 4.39% JSW Energy Limited 3.69% Industria Manufacturing 3.67% Tata Exsi Limited 2.84% Automobie 3.08% Sun Pharmaceuticas Industries Limited 2.41% Media & Entertainment 1.69% Services 1.32% Cement & Cement Products 1.23% Metas 0.86% Teecom 0.62% Chemicas 0.04% Texties 0.02% Cash & Cash Equivaent -3.48% Grand Tota % Note: The Scheme is having exposure to stock futures (short) against the above equity stocks and the gross exposure to derivatives is 66.69% of net assets as on March 31, Website ink to obtain scheme s atest monthy portfoio hoding: Scheme s Portfoio Turnover ratio (For the year ended March 31, 2017) times Key Information Memorandum & Appication Form 7

8 Schemes at a gance Scheme Name Type Investment Objective Asset Aocation Pattern AUM Indicative Aocations Risk Profie Invesco India An Open To generate income through Arbitrage Fund Ended Equity arbitrage opportunities Scheme emerging out of mis-pricing between the cash market and the derivatives market and through depoyment of surpus cash in fixed income instruments. Instruments Equity and Equity reated instruments 1 Equity Derivatives incuding stock futures and stock options 2 Money Market Instruments/ Debt instruments 3 and Fixed Income Derivatives (% of tota assets) Minimum Maximum High/Medium/ Low High High Low to Medium Notes 1 The exposure to derivative shown in the above asset aocation tabes is the exposure taken against the underying equity investments and shoud not be considered for cacuating the tota asset aocation. The idea is not to take additiona asset aocation with the use of derivatives. 2 The notiona vaue exposure in derivatives securities woud be reckoned for the purposes of the specified imits, the margin money depoyed on these positions woud be incuded in the Money Market category. 1.1 The maximum derivative position wi not exceed 80% of the portfoio (i.e. net assets incuding cash). The maximum fixed income derivative position wi not exceed 35% of the portfoio (i.e. net assets incuding cash). 3 Debt instruments may incude securitized debt (excuding foreign securitised debt) upto 30% of the net assets. (in Crs.) as on 31/03/17 Live Foios as on 31/03/ Invesco India An Banking Fund Open E n d e d Banking S e c t o r Scheme Invesco India An Open Business Leaders Ended Equity Fund Scheme Invesco India Contra Fund An Open Ended Equity Scheme To generate ong-term capita growth from a portfoio of equity and equity-reated securities of companies engaged in the business of banking and financia services. To generate ong term capita appreciation by investing in Equity and Equity Reated Instruments incuding equity derivatives of companies which in our opinion are eaders in their respective industry or industry segment. To generate capita appreciation through investment in equity and equity reated instruments. The Scheme wi seek to generate capita appreciation through means of contrarian investing. Equity and Equity Reated Instruments of the constituents of Nifty Bank 1 Equity and Equity Reated Instruments of banking and financia services companies other than the constituents of Nifty Bank 1 Debt 2 & Money Market Instruments High High 1 Maximum exposure to the derivatives sha not exceed 50% of the Net assets of the Scheme, subject to the imits as specified by SEBI, from time to time. 1.1 Debt instruments may incude securitized debt (excuding foreign securitized debt) upto 35% of the net assets Low to Medium Equity & Equity Reated Instruments High 1 Of companies which in our opinion are eaders in their respective industry or industry segment. 2 Investment in securitized debt incuding pass through certificate (PTC) sha not Money Market Instruments & Debt Securities Low to Medium exceed 20% of the net assets of the Scheme. The Scheme wi not invest in foreign securitized debt. 1.1 The maximum derivative position wi be restricted to 50% of the net assets. Equity & Equity Reated High 1 Maximum exposure to the Instruments 1 derivatives sha not exceed 50% of the net assets of the Money Market Instruments & Debt Securities Low to Medium Scheme, subject to the imits as specified by SEBI, from time to time Debt instruments may incude securitized debt (excuding foreign securitised debt) upto 100% of the debt component , , ,007

9 Scheme Name Invesco India Dynamic Equity Fund Invesco India Growth Fund Invesco India PSU Equity Fund Type Investment Objective Asset Aocation Pattern AUM Indicative Aocations Risk Profie An Open Ended Equity Scheme To generate ong-term capita growth from a focused portfoio of predominanty equity and equity-reated securities. An Open To generate ong-term capita E n d e d Diversified E q u i t y Scheme growth from a diversified portfoio of predominanty equity and equity-reated securities. An Open Ended Equity Scheme To generate capita appreciation by investing in Equity and Equity Reated Instruments of companies where the Centra / State Government(s) has majority sharehoding or management contro or has powers to appoint majority of directors. Instruments (% of tota assets) Minimum Maximum High/Medium/ Low Notes Equity and Equity Reated Instruments High 1 Maximum exposure to the derivatives sha not exceed 50% of the net assets, subject to the imits as specified by Debt 2 & Money Market Instruments 0 30 Low to Medium SEBI, from time to time Debt instruments may incude securitized debt (excuding foreign securitised debt) upto 30% of the net assets. Equity and Equity Reated Instruments High 1 Maximum exposure to the derivatives sha not exceed 50% of the net assets, subject to the imits as specified by Debt 2 & Money Market Instruments Equity and Equity Reated Instruments of the constituents of S&P BSE PSU Index Equity and Equity Reated Instruments of PSU companies other than the constituents of the S&P BSE PSU Index Equity and Equity Reated Instruments of non PSU companies 1 Debt 2 & Money Market Instruments 0 35 Low to Medium SEBI, from time to time Debt instruments may incude securitized debt (excuding foreign securitised debt) upto 35% of the net assets High 1 Companies which are PSU at the time of investment and which may subsequenty become non PSU because of 0 35 High 0 20 High 0 35 Low to Medium privatization or disinvestment. 2 Investment in securitized debt incuding pass through certificate (PTC) sha not exceed 20% of the net assets. The Scheme wi not invest in foreign securitized debt. 1.1 The maximum derivative position wi be restricted to 50% of the net assets. (in Crs.) as on 31/03/17 Live Foios as on 31/03/ , , ,911 Invesco India Tax Pan Invesco India Mid Cap Fund An Open e n d e d equity inked savings scheme with a ock-in period of 3 years An open e n d e d e q u i t y scheme To generate ong-term capita growth from a diversified portfoio of predominanty equity and equity-reated securities. To provide ong term capita appreciation by investing in a portfoio that is predominanty constituted of Equity and Equity reated Instruments of Mid Cap Companies. Equity and Equity Reated High 1 Maximum exposure to the Instruments 1 derivatives sha not exceed 50% of the net assets of the Money Market Instruments 0 20 Low to Medium Equity and Equity Reated Instruments out of which: Mid Cap Companies High Companies other than Mid Cap Companies Debt 1 & Money Market Instruments Scheme, subject to the imits as specified by SEBI, from time to time. 1.1 The Scheme does not intend to invest in securitized debt High 1 Investment in securitized debt sha not exceed 35% of the net assets of the Scheme High 0 35 Low to Medium The Scheme wi not invest in foreign securitized debt. Maximum exposure to the derivatives sha not exceed 50% of the net assets of the Scheme, subject to the imits as specified by SEBI, from time to time , ,760