Reliance ETF Nifty 100 (Formerly R*Shares CNX 100 ETF) An Open Ended Index Exchange Traded Fund [Rajiv Gandhi Equity Savings Scheme (RGESS) Qualified Scheme] This product is suitable for investors who are seeking*: Product labels Long term capital growth Investment in equity and equity related securities and portfolios replicating the composition of Nifty 100 Index, subject to tracking errors. *Investors should consult their financial advisers if in doubt about whether the product is suitable for them. Investors understand that their principal will be at Moderately High risk Contents Why Equity ETF? Page 2 Strategies used through Index based Equity ETFs Page 2 Transaction Options available for investors Page 2 Creation Unit Size Page 2 Reliance ETF Nifty 100 - Investment Objective & Positioning Page 3 Benefits of Reliance ETF Nifty 100 Page 3 Why Invest in Nifty 100 Index? Page 3 Current Valuations Page 3 Constituents of Reliance ETF Nifty 100 Page 4 Scheme Features Reliance ETF Nifty 100 Page 5 Disclaimers Page 5 Reliance Nippon Life Asset Management Limited (RNAM) (formerly Reliance Capital Asset Management Limited) is one of the largest asset managers with more than 21 years of experience in managing wealth of investors with a robust distribution network in India and a global reach through its various subsidiaries. To cater to the increasing demand for passive management, we offer a variety of Exchange Traded Funds (ETFs) under Reliance ETFs. Currently, we offer thirteen equity ETF s benchmarked against Nifty Bank Index, Nifty 100 Index, Nifty 50 Index, Nifty India Consumption Index, Nifty Dividend Opportunities 50 index, Nifty 50 Value 20 Index, Nifty Next 50 Index, Nifty Infrastructure Index, Nifty50 Shariah Index, Nifty PSU bank Index, Nifty CPSE Index, Heng Seng Index & S&P BSE Sensex Index, two debt ETF, Gilt ETF benchmarked against Nifty 8-13 yr G- Sec Index & Liquid ETF in money market space and one commodity ETF based on domestic prices of Gold. 1
Why Equity ETF? Ease of transaction - Can be easily bought / sold like any other stock on the exchange through terminals spread across the country Ease of Liquidity - Can be bought / sold anytime during market hours (subject to availability of buyer/seller) at prices prevailing in the market. Thus, investor transacts at real-time prices. Low Cost - Generally less expensive than investing in multiple individual securities or a mutual fund Other Special Features Instant diversification through exposure to a large number of stocks by purchasing as low as 1 unit Buying / selling at close to live price and not end-of-day, also ability to put limit orders Authorised Participants / Large investors can buy in creation unit size directly from the AMC at Live Prices unit creation unit sizes Strategies used through Index based Equity ETFs Liquidity Management - ETFs can be used for a given percentage of each asset class to provide a liquidity buffer across the asset allocation Portfolio Completion - ETFs allow investors to gain exposure to an asset class that is under-represented in the asset allocation Cash Equitization ETFs assist in remaining fully invested into equity as per the allocation model, while maintaining liquidity, thus minimizing the cash drag effect on the portfolio Portfolio Transitions Since ETFs are passive funds, they may help maintain market exposure while there are changes in sector/stock allocations in a portfolio, hence avoids the risk of missing any market movement Transaction Options available for investors Subscription Process Features Through Stock Exchange online terminal / stock broker Can trade as less as 1 Unit Funding to be done on T+1 Unit credit on T+2 Transaction on Exchange traded price No paperwork Transaction on order matching and availability of quotes Through AMC (Authorized Participants & Large Investors) Transaction form with requisite documents Can transact in multiples of creation unit size Can happen in Cash or basket of stocks Transaction in exchange of Portfolio deposit & Cash Component Redemption Process Features Through Stock Exchange online terminal / stock broker Can trade as less as 1 Unit Units taken on T+1 Amount credited T+2 Through AMC (Authorized Participants & Large Investors) Redemption Request Can trade in multiples of creation unit size Can happen in Cash or basket of stocks Transaction in exchange of Portfolio deposit & Cash Component Live Prices (NAV) with the basket is available on Bloomberg page RITE for reference Creation Unit Size Creation Unit size is the minimum denomination of unit that can be directly purchased/redeemed from AMC Tradable Unit Composition Creation Unit Size NAV Value 31st July 2017 Approx. Basket Value (Rs.) 1 Unit Reliance ETF Nifty 100 ~ 1/100 of Nifty 100 Index * NAV as of 31st July 2017 taken as reference value 100,000 units of Reliance ETF Nifty 100 106.5862 10658620 Importance of Creation Unit Size In case of non-availability of sizeable quote, Investors can transact with the AMC in creation unit lots Investors can transact both in form of cash or stock basket comprising the index Units are created at live NAV price plus expenses 2
Reliance ETF Nifty 100 Investment Objective- Reliance ETF Nifty 100 The investment objective of the scheme is to provide investment returns that, before expenses, closely correspond to the total returns of the securities as represented by the Nifty 100 Index, subject to tracking errors. However, there can be no assurance or guarantee that the investment objective of the Scheme will be achieved. Positioning Reliance ETF Nifty 100 Reliance ETF Nifty 100 is an Exchange Traded Fund (ETF) listed on NSE and BSE, and invests in stocks of Nifty 100 Index in the same proportion as the underlying Index Reliance ETF Nifty 100 is less expensive than investing in individual securities of the Nifty 100 Index. It provides an opportunity to investors for passively investing in a well-diversified portfolio of top 100 companies of India as per free float market capitalization, as approximately represented by Nifty 100 Index Benefits of Reliance ETF Nifty 100 Well Defined Portfolio: Reliance ETF Nifty 100 investment strategy & stock selection is clearly defined; it would replicate the Nifty 100 Index & invest only in companies forming the index in the same proportion as the underlying Diversification: Buying a single unit currently offers diversification of 100 stocks across 48 sectors Transparency: The Nifty 100 Index constituents are made available in public domain on by NSE Liquidity: ETF units are traded on exchanges & can be easily liquidated during trading hours. Authorised Participants / Large Investors also have the option of coming to the AMC for procurement/sale of units in creation unit sizes (1,00,000 units with 1 unit equivalent to 1/100 of Nifty 100 Index) Combined performance of Nifty 50 + Nifty Next 50: Nifty 100 Index tracks the behavior of combined portfolio of two indices viz. Nifty 50 & Nifty Next 50 Index track Record: Launched in January 2003, the index has a track record of 13 years Source: NSE & IISL Why Invest in Nifty 100 Index? Nifty 100 Index gives the diversification of Nifty 50 plus Nifty Next 50 total forming 100 stocks across 22 broad sectors forming approx 80% of free float market capitalization of all stocks listed on the National Stock Exchange, thereby being a real broad based index representation of the diversified equity market in India. Composition: The index comprises of Nifty 50+ Nifty Next 50 which gives an additional beta to the portfolio. The composition of Nifty Junior in the index has risen over a period of time in the index due to performance Adequately suited for broad based exposure: Index diversifies the investment across 100 stocks comprising of 22 broad sectors, hence is ideally suited for getting a broad based diversified exposure to equity markets The Next 50 advantage: We have witnessed that Nifty Next 50 component has outperformed broad-based Nifty 50 over consistent periods. Hence Nifty 100 suits an ideal investment portfolio giving an added exposure to Nifty Next 50 stocks in a risk adjusted manner Economic Revival: Historically witnessed, economic revival triggers growth in large-cap and larger-midcap stocks initially, later trickling to mid and small cap. Hence Nifty 100 is the ideal product poised to give that market revival advantage Correlation to Nifty: Nifty 100 is approximately 99% correlated to Nifty 50, hence in case of volatile markets, the investment can be hedged using derivatives *Sources: Bloomberg, BofAML Global Research estimates, World Bank, CSO, RBI, Ministry of Finance, NSSO, MOSPI, Government of India, Ministry of Industry, IMF, RMF Internal Research Current Valuations Though the stock markets have rebounded after several years, the stock valuations are still low The key P/E, P/B and Dividend Yield of Nifty 100 Index are: Index Name Index Level P/E P/B Dividend Yield 01st-Dec-05 (Launch Date) 2649.75 17.17 3.94 1.62 07th-Jan-08 (Lowest) 2388.6 28.15 6.37 0.79 02nd-May-03 (Low Valuation) 2388.6 9.92 1.65 3.24 31st July 2017 (At Present) 10417.8 26.18 3.56 0.99 Note: Though Nifty 100 Index has been launched on 01st Dec 2005, the base date of the index is 01-Jan-03 and the financial data available from 01-Jan-03 the historical index values of previous years are available on www.nseindia.com. The above dates are taken only for illustration purpose which suggests that even though absolute levels of Nifty 100 Index increased, valuations are almost at the same levels or cheaper. Past performance may or may not be sustained in future. Investors are advised to consult their financial advisor before making any investment. Source: RMF Internal Research; and MFI 3
Top Constituents of Reliance ETF Nifty 100 as on 31st July 2017 Sr. No Stock Name Weightage (%) Sr. No Stock Name Weightage (%) 1 HDFC Bank Limited 7.97% 53 JSW Steel Limited 0.51% 2 HDFC Limited 6.26% 54 Titan Company Limited 0.50% 3 Reliance Industries Limited 5.90% 55 Bosch Limited 0.49% 4 ITC Limited 5.34% 56 LIC Housing Finance Limited 0.46% 5 Infosys Limited 4.45% 57 Aurobindo Pharma Limited 0.45% 6 ICICI Bank Limited 4.27% 58 Ambuja Cements Limited 0.43% 7 Larsen & Toubro Limited 3.24% 59 Dabur India Limited 0.39% 8 Tata Consultancy Services Limited 2.92% 60 Marico Limited 0.38% 9 Kotak Mahindra Bank Limited 2.73% 61 Shree Cements Limited 0.35% 10 State Bank of India 2.56% 62 Bank of Baroda 0.35% 11 Maruti Suzuki India Limited 2.27% 63 Ashok Leyland Limited 0.34% 12 Axis Bank Limited 1.95% 64 Tata Power Company Limited 0.33% 13 Tata Motors Limited 1.84% 65 Shriram Transport Finance Company Limited 0.33% 14 IndusInd Bank Limited 1.82% 66 ACC Limited 0.32% 15 Hindustan Unilever Limited 1.82% 67 Colgate Palmolive (India) Limited 0.32% 16 Yes Bank Limited 1.46% 68 Rural Electrification Corporation Limited 0.31% 17 Mahindra & Mahindra Limited 1.44% 69 Cadila Healthcare Limited 0.31% 18 Sun Pharmaceutical Industries Limited 1.29% 70 Cummins India Limited 0.30% 19 Bharti Airtel Limited 1.22% 71 Tata Motors Limited (DVR Shares) 0.29% 20 Asian Paints Limited 1.15% 72 Bharat Heavy Electricals Limited 0.29% 21 Vedanta Limited 1.15% 73 Siemens Limited 0.29% 22 HCL Technologies Limited 1.12% 74 United Spirits Limited 0.28% 23 Power Grid Corporation of India Limited 1.08% 75 Bharat Electronics Limited 0.28% 24 Oil & Natural Gas Corporation Limited 1.05% 76 Idea Cellular Limited 0.28% 25 Hero MotoCorp Limited 1.05% 77 Container Corporation of India Limited 0.28% 26 UltraTech Cement Limited 0.93% 78 Pidilite Industries Limited 0.27% 27 Eicher Motors Limited 0.90% 79 Petronet LNG Limited 0.27% 28 NTPC Limited 0.89% 80 Punjab National Bank 0.27% 29 Bajaj Auto Limited 0.84% 81 Havells India Limited 0.25% 30 Tata Steel Limited 0.84% 82 Power Finance Corporation Limited 0.25% 31 Indiabulls Housing Finance Limited 0.84% 83 Glenmark Pharmaceuticals Limited 0.23% 32 Indian Oil Corporation Limited 0.83% 84 NMDC Limited 0.22% 33 Bharat Petroleum Corporation Limited 0.81% 85 DLF Limited 0.19% 34 Bajaj Finance Limited 0.80% 86 ICICI Prudential Life Insurance Company Limited 0.19% 35 Wipro Limited 0.80% 87 Divi's Laboratories Limited 0.19% 36 Coal India Limited 0.72% 88 Oracle Financial Services Software Limited 0.18% 37 UPL Limited 0.71% 89 Sun TV Network Limited 0.17% 38 Hindalco Industries Limited 0.71% 90 ABB India Limited 0.17% 39 Adani Ports and Special Economic Zone Ltd 0.70% 91 Procter & Gamble Hygiene and Health Care Ltd 0.16% 40 Bajaj Finserv Limited 0.67% 92 Hindustan Zinc Limited 0.16% 41 Zee Entertainment Enterprises Limited 0.65% 93 Emami Limited 0.15% 42 Dr. Reddy's Laboratories Limited 0.64% 94 NHPC Limited 0.14% 43 Hindustan Petroleum Corporation Ltd 0.63% 95 Steel Authority of India Limited 0.14% 44 Cipla Limited 0.63% 96 GlaxoSmithKline Consumer Healthcare Limited 0.14% 45 Bharti Infratel Limited 0.62% 97 Torrent Pharmaceuticals Limited 0.14% 46 Godrej Consumer Products Limited 0.58% 98 InterGlobe Aviation Limited 0.13% 47 Motherson Sumi Systems Limited 0.56% 99 Oil India Limited 0.13% 48 Lupin Limited 0.54% 100 United Breweries Limited 0.12% 49 GAIL (India) Limited 0.53% 101 GlaxoSmithKline Pharmaceuticals Limited 0.11% 50 Tech Mahindra Limited 0.53% Cash & Cash Equivalent 0.48% 51 Piramal Enterprises Limited 0.53% 52 Britannia Industries Limited 0.51% Total 100.00% Note: The stocks mentioned forms a part of the portfolio of the scheme and may or may not form a part of the portfolio in future. Please read Scheme Information Document carefully for more details and risk factors. Source: RMF website 4
Scheme Features Reliance ETF Nifty 100 Nature of Scheme Benchmark Open Ended Exchange Traded Fund (Rajiv Gandhi Equity Savings Scheme (RGESS) Qualified Scheme) Nifty 100 Index Fund Manager Payal Wadhwa Kaipunjal (Managing Scheme Since Jan 2017) Inception Date 22/03/2013 Rule of 20-25 Asset Allocation Transparency/NAV Disclosure Value of Unit Load Structure Minimum Application Amount Dematerialization Rule of a minimum of 20 investors and no single investor accounting for more than 25% of the corpus of the Scheme does not apply to ETFs Securities constituting Nifty 100 Index : 95%-100% Money Market instruments including CBLO (with maturity not exceeding 91 days): 0%-5% The NAV will be calculated and disclosed by the Fund at the close of every Business Day which shall be published in at least two daily newspapers and also uploaded on the AMFI site www.amfiindia.com and Reliance Mutual Fund site i.e. www.reliancemutual.com. The value of each unit of the Scheme would be approximately equal to 1/100th of the value of Nifty 100 Index Entry & Exit Load : Nil The minimum number of Units that can be bought or sold on the exchange is 1 (one) unit and in multiples of 1 unit. Directly from AMC: Allowed to Authorized Participants & Large Investors in form of creation unit size of 1,00,000 units Units of the scheme will only be available in Dematerialized (electronic) form only. Scheme specific risk factors: The scheme invests in equity instrument and hence carries risk inherent in equities. Trading volumes, settlement periods and transfer procedures may restrict the liquidity of the investments. Investment in Money Market is subject to liquidity, credit, interest rate & reinvestment risk. For further Scheme specific risk factors, please refer the scheme information document. Disclaimers BSE Disclaimer: It is to be distinctly understood that the permission given by BSE Ltd. should not in any ways be deemed or construed that the SID has been cleared or approved by BSE Ltd. nor does it certify the correctness or completeness of any of the contents of the SID. The investors are advised to refer to the SID for the full text of the Disclaimer clause of the BSE Ltd. NSE Disclaimer:It is to be distinctly understood that the permission given by NSE should not in any way be deemed or construed that the Scheme Information Document has been cleared or approved by NSE nor does it certify the correctness or completeness of any of the contents of the Draft Scheme Information Document. The investors are advised to refer to the Scheme Information Document for the full text of the Disclaimer Clause of NSE The views expressed herein constitute only the opinions and do not constitute any guidelines or recommendation on any course of action to be followed by the reader. This information is meant for general reading purposes only and is not meant to serve as a professional guide for the readers. Certain factual and statistical (both historical and projected) industry and market data and other information was obtained by RNAM from independent, third-party sources that it deems to be reliable, some of which have been cited above. However, RNAM has not independently verified any of such data or other information, or the reasonableness of the assumptions upon which such data and other information was based, and there can be no assurance as to the accuracy of such data and other information. Further, many of the statements and assertions contained in these materials reflect the belief of RNAM, which belief may be based in whole or in part on such data and other information. 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 based upon the information provided herein, due care has been taken to ensure that the facts are accurate and opinions given are fair and reasonable. This information is not intended to be an offer or solicitation for the purchase or sale of any financial product or instrument. Recipients of this information should rely on information/data arising out of their own investigations. Readers are advised to seek independent professional advice, verify the contents and arrive at an informed investment decision before making any investments. None of the Sponsor, the Investment Manager, the Trustee, their respective directors, employees, affiliates or representatives shall be liable for any direct, indirect, special, incidental, consequential, punitive or exemplary damages, including lost profits arising in any way from the information contained in this material.the Sponsor, the Investment Manager, the Trustee, any of their respective directors, employees including the fund managers, affiliates, representatives including persons involved in the preparation or issuance of this material may from time to time, have long or short positions in, and buy or sell the securities thereof, of company(ies) / specific economic sectors mentioned herein. Mutual Fund investments are subject to market risks, read all scheme related documents carefully. 5