Fidelity Launches Fidelity Flexi Gilt Fund

Mumbai, Maharashtra, India

Fidelity International's Indian asset management company announced the launch of its Fidelity Flexi Gilt Fund, an open ended gilt scheme that aims to generate sovereign linked returns primarily through investments in securities issued by the Central / State Government or any security unconditionally guaranteed by the Central / State Government. The NFO for the fund will be open from July 23 - 31, 2008 and thereafter it will open for ongoing purchases and redemptions from August 8, 2008. Sameer Kulkarni is the fund manager of the Fidelity Flexi Gilt Fund, which is benchmarked to the I Sec Composite Gilt Index.

Ashu Suyash, Managing Director and Country Head - India, Fidelity International, said: "At a time when investors have turned risk averse and credit concerns abound, gilt funds can fill a critical gap in asset allocation. By definition, government securities carry no credit risk and investing in them through a gilt fund also gives investors the added benefits of liquidity and tax efficiency as compared to RBI bonds, PPF or other similar products."

Sameer Kulkarni, who is the fund manager for the Fidelity Flexi Gilt Fund, said, "In the current tough economic environment, there is a possibility of deterioration in corporate credit quality. Government debt, on the other hand, comes with a sovereign guarantee and there is no risk to capital or interest payments. Moreover, as economic growth comes under pressure, the softening of interest rates has historically been used to act as a stimulus. Investments in high yield government securities have the potential to benefit from such a scenario."

The Fidelity Flexi Gilt Fund will offer Growth and Dividend options. The minimum initial investment is Rs. 5000. The Fund has no entry load, but an exit load of 0.50% will be applicable for redemptions within 6 months from the date of purchase, in case of purchase amount less than Rs. 50, 00, 000 applying First in First Out basis. A switch-out or a withdrawal under SWP or transfer under STP may also attract an exit load / CDSC like any redemption.

Investors can invest in the Fidelity Flexi Gilt Fund even through the SIP route with a minimum amount of Rs. 500 per installment with the total of all installments not being less than Rs. 5000/- In addition, the systematic transfer and withdrawal plans are available as well.

About Fidelity:

Fidelity International's Indian asset management company started operations in the country in 2004. Its first fund, the Fidelity Equity Fund, was launched in March 2005. Today, with total assets under management of over Rs. 8000 crores (Source: AMFI - average AUM in June 2008) and more than 1.5 million customer accounts, Fidelity offers Indian investors investment options through its five equity funds and four fixed income funds. For more information, please visit www.fidelity.co.in

FIL Fund Management Private Limited is the Indian arm of Fidelity International, one of the world's leading global investment management companies with operations in 23 countries and more than US$260 billion in assets under management (as at March 31, 2008). FIL provides mutual funds, retirement services, including defined benefit and defined contribution pension schemes, and specialist institutional mandates to individual and institutional investors outside the Americas. FIL's US affiliate, Fidelity Management and Research LLC (FMR) is one of the US's largest mutual fund companies and manages over US$ 1.5 trillion (as at March 31, 2008). FIL has constant access to the investment analysis carried out by FMR and Pyramis. FIL benefits from the insights of nearly a thousand investment professionals around the globe1, covering 95% of the world's stock markets by capitalisation2. Central to Fidelity's success is a pioneering spirit, a commitment to innovation that sets new industry standards and an unmatched investment in research, talent, technology and investor education.

Sources:

1. FIL Limited and FMR LLC as of 31 December 2007. Data is unaudited. Investment professionals include division management, portfolio managers, traders, research analysts and research associates. These figures reflect the resources of FIL Limited (FIL) and its subsidiaries and FMR LLC, an affiliate, and its subsidiaries.

2. Fidelity Equity Research as of 1 January 2007. These figures reflect the resources of FMR LLC, a US company, and its subsidiaries, and those of FIL Limited, a non-US company and affiliate, and its subsidiaries.

CI00937

-- Scheme Classification: An open ended gilt scheme. Investment Objective: To generate sovereign linked returns primarily through investments in sovereign securities issued by the Central Government and/or a State Government or reverse repos in such securities or any security unconditionally guaranteed by the Central/State Government.

-- Normal Asset Allocation: Securities, issued by Central Government/State Government(s) including reverse repo in such securities as may be permitted by SEBI/RBI from time to time and money market instruments: up to 100%.

-- Terms of issue: Units of Rs. 10 per unit for cash during the new fund offer and at applicable NAV thereafter. Minimum initial application amount: Rs. 5,000 per application. Minimum additional application amount: Rs. 1,000 per application. Minimum redemption amount/units: Rs.1,000/100 units. Offer Document, Key Information Memorandum and Application Forms/Transaction Slips will be available at the ISCs/distributors' offices. General Services: Investors can contact us at the toll-free number "1800-200-0600". NAVs will be calculated on every business day and published in two daily newspapers on all business days. Purchase/Redemption on all business days.

-- Loads - Entry: Nil. If the AMC introduces an entry load, no entry load will be charged for direct applications received by the AMC i.e. applications submitted at the designated collection centres or through websites viz. www.fidelity.co.in or www.camsonline.com and which are not routed through any distributor/agent/broker. Exit: For redemptions within 6 months from the date of purchase, in case of purchase amount less than Rs. 50, 00, 000, applying first in first out basis: 0.50%. A switch-out or a withdrawal under SWP or a transfer under STP may also attract an exit load / CDSC like any redemption.

Risk factors:

-- Mutual funds, like securities investments, are subject to market risks and there is no guarantee against loss in the scheme or that the scheme's objectives 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 various factors and forces affecting capital markets.

-- Past performance of the Sponsor/the AMC/the Mutual Fund does not indicate the future performance of the scheme.

-- Fidelity Flexi Gilt Fund is the name of the scheme, and this does not in any manner indicate the quality of the scheme, its future prospects or returns.

-- In addition to the factors that affect the values of securities, the NAV of units of the scheme will fluctuate with the movement in the broader fixed income, money market and derivatives market and may be influenced by factors influencing such markets in general including but not limited to economic conditions, changes in interest rates, price and volume volatility in the bond and stock markets, changes in taxation, currency exchange rates, foreign investments, political, economic or other developments and closure of the stock exchanges.

-- Please read the Offer Document of the scheme carefully before investing.

Statutory:

Fidelity Mutual Fund ('the Fund') has been established as a trust under the Indian Trusts Act, 1882, by FIL Investment Advisors (liability restricted to Rs. 1 Lakh). FIL Trustee Company Private Limited, a company incorporated under the Companies Act, 1956, with a limited liability is the Trustee to the Fund. FIL Fund Management Private Limited, a company incorporated under the Companies Act, 1956, with a limited liability is the Investment Manager to the Fund. Fidelity, Fidelity International and Pyramid Logo are trademarks of FIL Limited.

Source: Fidelity Fund Management (Business Wire India)

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