The regular income scheme offers an assured return of 12.25 per cent per annum payable montly or 13 per cent yearly for the first year. Income in the subsequent years may go up or down depending on the market condition. The cumulative option allows the income to cumulate yearly and this paves way for capital growth.

The fund will repurchase the units of the scheme regularly one year after the date of allotment of the units (after September 30, 1999) at NAV related prices of each option. The redemption will be after five years at least at their face value of Rs 10. The repurchase load will be upto 5 per cent.

Under the monthly and yearly income option, the minimum investment is Rs 10,000 (or 1000 units) and the maximum can be Rs 1 crore for an individual. In the cumulativeoption, an investor has to subscribe at least 500 units at a price of Rs 10.

Dhanvarsha (13) also provides tax benefits. An investor can enjoy tax benefits under Section 80L (a maximum of Rs 12,000) and exemptioin under Section 54EA.

The scheme also provides Dhanvarsha (5) investors the option of switchover to Dhanvarsha (13) at redemption prices as on July 31, 1998. After the swithover, the balance money, if any, will be refunded to the investors.

The primary investment objective of the scheme is to generate a steady flow of income through investment mainly in fixed income instruments. The secondary objective of the scheme is to generate capital appreciation. The fund will invest in a wide range of fixed income securities including money market, equity and equity related instruments. The investment in debt securities will not be less than 65 per cent (including 35 per cent in money market) and equity up to 35 per cent. The fund will invest in debt securities with a rating of A and above and it can evengo up to 100 per cent.

LIC Mutual Fund is targeting a minimum subscription of Rs 10 crore and maximum of Rs 300 crore for its latest scheme Dhanvarsha (13). If the fund fails to collect Rs 10 crore, the money will be returned to investors. As on May 20, 1998, aggregate NAV of all schemes of LIC MF is Rs 1018.92 crore. At present, the sponsor proposes not to invest in securities of any other group companies.