Christened the Reliance Assured Income Fund, the draft prospectus for the fund has been filed with the Securities and Exchange Board of India. The AMC offers three plans under the scheme -- the Monthly Income Plan, the Annual Income Plan and the Growth Plan.

The rate of return for the monthly and the annual income plans are yet to be decided by the asset management company (AMC). However, feels a mutual fund analyst, given that the UTI is a bigger player in the assured return sector of the MF industry, the Reliance Capital scheme has to guarantee a higher return than the returns that accrue from UTI's monthly income plans to attract investors.

According to the industry analyst, the scheme is directed more towards netting inthe bigger investors than the smaller ones. It will be highly beneficial to those corporates who have recently realised a substantial one-time payment from a sale or anything to park that money into this fund. Only last year, when Max India realised a one-time lump sum amount from the sale of its subsidiary's stake in Hutchison Max, the money was invested in an assured income plan floated by Cholamandalam AMC, the analyst said. The money invested in such schemes are entitled to capital gains tax benefits under sections 54EA and 54EB.

According to the draft prospectus, the scheme will be open for repurchase at NAV-related prices after three years from the date of allotment. Going by the investment objectives spelt out in the draft prospectus, the scheme will invest mainly in the debt instruments with medium-to-low risk profiles. The percentage of its investments in debt will be in the range of 65 to 100 per cent. The balance, if any, will be invested in money market instruments.

Currently, Reliance CapitalAMC has four mutual funds under its management. With Reliance Growth slotted to go open-ended in June next, there will be two open-end equity funds - Reliance Vision being the other, in the Reliance MF stable. Besides the two equity schemes, Reliance Capital AMC also manages open-end debt and liquid schemes. The combined assets under management are estimated to be in the region of Rs 120-130 crore.