Reliance Gold Exchange Traded Fund

An Open Ended Gold Exchange Traded Fund that tracks the domestic prices of gold through investments in physical gold

Index Positioning of the Fund... Investment Philosophy Benefits of Investing in Reliance Gold ETF... Sector View & Outlook Portfolio & Scheme Features How to invest

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Positioning of the Fund

Reliance Gold Exchange Traded Fund is a passively managed exchange traded fund which endeavors to track and provide similar returns to its benchmark- the domestic prices of gold, through investment in physical gold and money market instruments.

Investment Philosophy
A smart, and easy way to invest in Gold in a demat form. An Investment Opportunity which enables an investor to allocate gold to his portfolio Open-ended exchange traded fund easy entry & exit through the stock exchange (NSE/BSE). Invests exclusively in physical gold which shall be of fineness( or purity) of 995 parts per 1000 ( 99.5 % ) or higher Portfolio focused on providing returns that closely correspond to the returns provided by physical gold.

Benefits of Investing in Reliance Gold ETF (RGETF)

Low cost : When you buy RGETF you have to pay brokerage charges, which is usually much lower than paying for making charges when you buy physical

gold. Transparency: RGETF, the rates are transparent as they are traded like a share on the National Stock Exchange and therefore it provides the ability to buy and sell them quickly at the ruling market price and therefore highly liquid. There is no

consistency when you buy and sell physical gold across jewellers or banks Safety & Security: Zero concerns about security, theft. Safeguard in the form of electronic mode in the case of unforeseen circumstances where you have lost all the physical wealth Collateral for trading on NSE: RGETF is accepted as collateral for trading on National Stock Exchange of India Ltd. Ability to buy in small units: RGETF one unit is approximately equal to one gram of gold which can be directly bought through the trading terminals. No securities transaction tax for trading RGETF on the National Stock Exchange Of India Ltd . Wealth tax is also Nil. Feasibility: RGETF units are available on NSE and BSE which provides feasibility to the investor to buy and sell the units during trading hours of the exchange. It enables to to limit orders as well as permits intraday trading.

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Sector View & Outlook

Overview: Global financial markets remain fragile and volatile. The only thing being discussed globally is the European sovereign debt. Concerns over Greek default and its impact on other European nations is driving down global financial markets. Greece being a small nation has a limited impact on global economy. Greece is not alone with its sovereign debt problems; Italy and Spain will have a much more severe impact. Italys economy is around 7 times larger than Greeces economy. Any concerns over Italy have the potential to have a magnified impact on global growth. Such concerns are being reflected in cost of funding. Funding cost for Italy has spiked up above 7% vis--vis average of 5.6% (year till date). The spike in interest cost acts as a major road block to growth momentum. Again, Sovereign debt crisis in Europe has increase the default risk and that may lead to huge losses for landing banks.

US dollar tends to benefit during such environment due to lack of alternative currency hedge. Dollar index is currently hovering around 77.84 after hitting a low of 74.724 during 27 October, 2011. Euro is the worst hit by sovereign crisis. Japanese and Swiss National banks are trying their best to keep their currency depreciated, as appreciating local currency hurts their economy. In absence of any meaningful alternative people tend to park money in US treasury thereby increasing the demand for US dollar. The current spike in dollar indicate risk aversion among investors which is generally bullish for gold prices.

Indian gold prices are at record high levels of Rs 29300/10grams on back of weaker rupee. Indian gold price become more pricy when rupee weakens. Rupee is currently hovering around Rs 50.60/ USD and has depreciated by 14.9 % since the end of July, 2011. International gold prices are well below their all time high ~1921 USD/Oz reached during 6th September, 2011. Gold prices are currently hovering around 1780 USD/Oz after hitting a low of 1532 USD/Oz on 26 September, 2011. Volatility across asset class is on a rise and can be attributed to lowering of risk appetite among many investors who refrain from active trading. Globally, golds investment flows in November (till 14th November, 2011) remained healthy, ETPs (Exchange Traded Products) have seen a net increase of 28 tones, more than the net inflows of entire month of October, 2011. Physical demand during the month of October, 2011 was driven by festival buying. Dhanteras and Deepavali are seen as auspicious days for buying gold and demand remained robust during that period. The physical premium, i.e. difference between domestic prices of gold and international prices of gold converted into Indian rupees and adjusted for taxes and duties, shooted up sharply during this period indicating a strong physical demand in India. Generally, the strong physical demand is followed by spike up in international gold prices.

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Outlook:

The sovereign debt crisis seems to be engulfing global growth. German investors confidence fell to a three year low in November, 2011 on concerns that debt crisis will drive Europes largest economy into recession. Credit spreads and credit default swaps are widening. The Spanish-German spread widened to a euro-lifetime high of 453 basis points.

It is very hard to imagine bullish factors supporting gold prices will die out any time soon. US and Europe is not likely to come out of dumps any time soon. They may be able to suppress the problem for time being but it is almost impossible to bring a permanent solution to this problem without going through a very painful process. Infusion of liquidity will be the most likely temporary solution, but the longer term undesirable impact of same is higher inflation numbers and higher inflation is supportive of gold prices. The really need of the hour is austerity measures but they are hard to implement, as it requires lots of national sacrifice and compromise. Such measures will lead to lots of social unrest and political tensions. Referendum in Greece is a good example for the same. These coupled with other geopolitical tensions provides a conducive environment for gold bulls. Gold does not have statistically significant correlation with other financial assets and has comparatively lower volatility. Hence, besides being an absolute performer, gold may be consider for portfolio diversification.

The long term outlook for gold looks positive. Any correction can be looked at opportunity to accumulate, and long term prudent investor should continue investing in gold in a systemic manner as it may help in improving risk adjusted returns for the portfolio.

Common Source for Gold View as on 15th November, 2011: Bloomberg, Reuters, World Gold Council

Portfolio & Scheme Features As on 31st October, 2011

Asset Allocation as on 31st October, 2011
Gold 995 1 KG BAR Cash and Other Receivables 100.32 % -0.32%

Scheme Features
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, performance of the scheme may differ from that of the domestic prices of Gold due to expenses and or other related factors.

Investment Objective

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Inception Date November 22, 2007 On the Exchange: Any investor eligible to trade on the exchange can buy minimum one unit of Reliance Gold ETF which is approximately equal to 1 gram of gold on NSE/BSE Through the AMC: Purchases directly from the Mutual Fund is restricted to Authorized Participants as appointed by the AMC provided the value of units to be purchased is in creation unit size of 1000 units and cash component if any. In addition to authorized participant(s) Reliance Gold
Savings Fund can also buy / sell the units from the fund in Creation Unit Size.

Minimum Investment

Entry Load* :Not Applicable Load Structure

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

Purity of Gold

Exit Load: Nil All gold bullion held in the scheme's allocated account with the custodian shall be of fineness (or purity) of 995 parts per 1000 (99.5%) or higher
As there are no indices catering to the gold sector/securities linked to Gold,

Benchmark

currently Reliance Gold Exchange Traded Fund is benchmarked against the price of Gold

Fund Manager

Hiren Chandaria

How to invest
The units of the fund are currently available on National Stock Exchange Of India Ltd (NSE) and Bombay Stock Exchange Ltd (BSE). An investor can directly buy and sell the units of scheme through the broker associated with NSE/BSE and he would receive the units in his demat account on a T+2 rolling settlement NSE Code/BSE Scrip Id BSE Scrip Pricing (per unit) Minimum Investment RELGOLD 590100 One unit= Approx one gram of gold On the Exchange: One unit Through the AMC(only for Authorised Participants as appointed by the AMC) : 1000 units

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Disclaimers
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 RCAM from independent, third-party sources that it deems to be reliable, some of which have been cited above. However, RCAM 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 RCAM, 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. Statutory Details: Reliance Mutual Fund has been constituted as a trust in accordance with the provisions of the Indian Trusts Act, 1882. Sponsor: Reliance Capital Limited. Trustee: Reliance Capital Trustee Company Limited. Investment Manager: Reliance Capital Asset Management Limited (Registered Office of Trustee & Investment Manager: 'H' Block,1st Floor, Dhirubhai Ambani Knowledge City, Koparkhairne, Navi Mumbai - 400 710, Maharashtra. . The Sponsor, the Trustee and the Investment Manager are incorporated under the Companies Act 1956. The Sponsor is not responsible or liable for any loss resulting from the operation of the Scheme beyond their initial contribution of Rs.1 lakh towards the setting up of the Mutual Fund and such other accretions and additions to the corpus. Reliance Gold Exchange Traded Fund (An open-ended Gold Exchange Traded Fund that tracks the domestic prices of gold through investments in physical Gold.) : 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. Mutual Funds and securities investments are subject to market risks and there is no assurance or guarantee that the objectives of the Scheme will be achieved. As with any investment in securities, the NAV of the Units issued under the Scheme can go up or down depending on the factors and forces affecting the capital markets. Reliance Gold Exchange Traded Fund is only the name of the Scheme and does not in any manner indicate either the quality of the Scheme, its future prospects or returns. Past performance of the Sponsor/AMC/Mutual Fund is not indicative of the future performance of the Scheme. The Mutual Fund is not guaranteeing or assuring any dividend. The Mutual Fund is also not assuring that it will make periodical dividend distributions, though it has every intention of doing so. All dividend distributions are subject to the availability of the distributable surplus in the Scheme. For details of scheme features apart from those mentioned above and scheme specific risk factors, please refer to the provisions of the Scheme Information Document. Scheme Information Document and KIM cum application form is available at all the DISCs/ Distributors of RMF/www.reliancemutual.com. It is to be distinctively understood that the permission given by the 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 Scheme Information Document. The investors are advised to refer to the Scheme Information Document for the full text of Disclaimer Clause of NSE. Please read the Scheme Information Document and Statement of Additional Information carefully before investing.

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