Reliance Mutual Fund launches infra fund

Reliance Anil Dhirubhai Ambani group-controlled Reliance Mutual Fund, today annnounced the launch of its Reliance Infrastructure Fund.

The infrastructure fund, an open-ended fund, will invest predominantly in companies engaged in infrastructure and infrastructure-related sectors in the country, Reliance Capital Asset Management CEO Sundeep Sikka told reporters here.

The primary investment objective of the fund will be to generate long-term capital appreciation. It will invest in equity and equity-related instruments of companies engaged in infrastructure and infrastructure-related sectors like transport, banks and financial institutions, energy, power and oil, metals and minerals, telecom and urban infrastructure amongst others.

"Infrastructure is a key priority for India and we hope a spurt of infrastructure spending in the economy on the back of a stable Government and ease of project financing," Sikka said.

The right time is now to invest in infrastructure and infrastructure-related firms, a sector which is likely to get a boost from the new government, he said.

"The valuations look more attractive and the environment stable with the new government settling in. This makes it the right time to launch an infastructure fund more than ever," Sikka said.

The new fund offers two plans-Retail and Institutional. Each plan has a growth and dividend plan option.

The fund will invest at least 65 per cent of its assets in engineering, cement and power stocks as well as banks, whereas the rest will be invested in debt and money markets.

"We expect investors in large numbers to participate in the ever-growing sector with long-term capital appreciation," Sikka said.

Reliance MF saw no meaningful redemptions in the last one year and is very optimistic on global flows into India.

The fund-house is currently avoiding sectors that can be hurt by a rupee rise.It was currently overweight on the textile and pharmaceutical sectors and underweight on the information technology sector.

The fund-house is keen to buy shares of PSUs when their disinvestment takes place and if valuations are good, a Reliance Mutual Fund official said on condition of anonymity.

Reliance Mutual Fund is managing a corpus of over Rs 88,388 crore for over 71-lakh investors as on April 2009.
Source : Business Standard