Skip to main content

Mutual Fund Review: Reliance MIP

 

The aggressive approach of Reliance MIP has rewarded its investors well…

Investors may encounter slight hiccups in returns but the fund's ability to bounce back has paid off over the long run. It has been a top quartile performer in five out of around seven years of its existence.

 

The fund manager actively manages the debt portfolio as per the interest rate scenario and takes opportunistic bets whenever he sees one. He does not hesitate in taking higher maturity bets. For example, the fund moved up the average maturity of its debt portfolio from mid 2008 while the 10-year benchmark yield was rising. From an average maturity of 1.27 years (June 2008) it went to 10.24 years (December 2008). As the yield came down in the last quarter, the fund delivered 14.62 per cent in that period (category average: 1.47%).

 

But if the bets go wrong, the outcome works accordingly. In the first quarter of 2009, the fund manager wasn't quick enough to lower the portfolio maturity when the 10-year benchmark yield again started moving up. The fund lost 2.84 per cent that quarter (category average: 0.21%).

 

Similarly, in the March 2008 quarter the fund manager increased the portfolio maturity to 7.99 years (March 2008). But with no rate cut, the move backfired and it lost 6.21 per cent (category average: -3.89%). Currently the average maturity of the fund's portfolio at 2.44 years is on the higher side.

 

Though the fund largely sports high rated papers, there has been lower quality occasionally to boost returns. In January 2009 real estate companies like Unitech and Sobha Developers accounted for 18 per cent of the portfolio.

 

A similar aggressive approach is seen in the equity portion which has averaged at 16.23 per cent since launch. His bold moves into mid- and small-caps are what helped the fund deliver 21.17 per cent in 2009. The fund manager, however, does attempt to diversify the risk with a bloated portfolio of 52 stocks. The latter is also the result of tremendous inflows into the fund. From Rs156 crore (March 2009) it has grown into Rs8,322 crore (December 2010).

 

This has resulted in a downward revision of the expense ratio of the fund which is now 1.55 per cent (September 2010) and is on the lower side in its category.

 

The fund is pretty regular in its dividend payments and has managed to pay dividends in 74 out of the total 85 months. However, it's only natural to expect the quantum of dividend to vary.

 

-----------------------------------------------------------------

 

Also, know how to buy mutual funds online:

 

Invest in DSP BlackRock Mutual Funds Online

 

Invest in Reliance Mutual Funds Online

 

Invest in HDFC Mutual Funds Online

 

Invest in Sundaram Mutual Funds Online

 

Invest in Birla Sunlife Mutual Funds Online

 

Invest in UTI Mutual Funds Online

  

Invest in SBI Mutual Funds Online

 

Invest in Edelweiss Mutual Funds Online

 

Invest in IDFC Mutual Funds Online

 

Popular posts from this blog

Birla SunLife Manufacturing Equity Fund

The Make in India program was launched by Prime Minister Naredra Modi in September 2014 as part of a wider set of nation-building initiatives. It was devised to transform India into a global design and manufacturing hub. The primary motive of the campaign is to encourage multinational as well domestic companies to manufacture their products in India. This would create more job opportunities, bring high-quality standards and attract capital along with technological investment to bring more foreign direct investment (FDI) in the country.   Why India as the next manufacturing destination?   The rising demand in India along with the multinational's desire to diversify their production to include low-cost plants in countries other than China, can help India's manufacturing sector to grow and create millions of jobs. In the words of our Honourable Prime Minister- Mr. Narendra Modi, India offers the 3 'Ds' for business to thrive— democracy,...
Read more

Total Returns Index brings out real Equity Funds Performers

From February, equity mutual funds have to change their benchmarks to account for dividend payments. Until now, funds used price-based benchmarks alone. TRI or total return indices assume that dividend payouts are reinvested back into the index. What this does is lift the overall index returns, because dividends get compounded. For example, the Sensex TRI index will consider dividend payouts of its constituent companies while the Nifty50 TRI index will consider dividends of its constituents. Using TRI indices as benchmarks comes on the argument that an equity funds earn dividends on the stocks in its portfolio, which they use to buy more stocks. Therefore, using an index that also considers dividend reinvestment would be a more appropriate benchmark. Shrinking outperformance With a stiffer benchmark, it is obvious that the margin by which an equity fund outperforms the benchmark would shrink. Rolling one-year returns from 2013 onwards, the average margin by which largecap funds out...
Read more

Stock Review: Havells

HAVELLS India's stock performance has been muted in the past three months, in line with the weak broader market. But, given the turnaround in its overseas subsidiary and the launch of new products in its consumer durable business, the company's stock may undergo a re-rating.    Havells is India's leading consumer electrical goods company, with consolidated sales of . 5,527 crore in the past four quarters. Its wholly-owned subsidiary Sylvania, which makes lighting and fixtures, has established brands in European, Latin American and Asian markets. Sylvania repre sented nearly half of the company's consolidated revenues in the first half of FY11.    Sylvania's poor financials hit Havells' consolidated performance in FY10. But, this has changed in the cur rent fiscal. Havells has reduced fixed costs of Sylvania by exiting from unprofitable businesses and outsourcing manufacturing to low-cost locations such as India and China. In the September 2010 quarter, Sylv...
Read more

Kisan Vikas Patra - KVP

  Kisan Vikas Patra (KVP) First launched in 1988, the Kisan Vikas Patra (KVP) is one of the premier and popular saving scheme offering from the Indian Postal Department. This product has had a very chequered history- initially successful, deemed a product that could be misused and thus terminated in 2011, followed by a triumphant return to prominence and popular consumption in 2014. The salient features of KVP are as follows- The grand USP- Money invested by the applicant doubles in 100 months (8 years, 4 months). KVPs are available in the following denominations- Rs.1000, Rs.5000, Rs.10,000 and Rs.50,000. The minimum purchase value for the KVP is Rs.1000. There is no maximum limit. KVPs are available at all departmental post offices across India. These certificates can be prematurely encashed after 2 ½ years from the point of issue. KVPs can be transferred from one individual to another and from one post office to another. ----------------------------------------------------- Inve...
Read more

How to generate a UAN Online

Best SIP Funds Online   In order to make Employees' Provident Fund (EPF) accounts portable, the Employees' Provident Fund Organisation (EPFO) had launched the facility of Universal Account Number (UAN ) in 2014. Having a UAN is now mandatory if you have an EPF account and are contributing to it. So far, you got this number from your employer and every time you changed jobs, you had to furnish this number to the new employer.  However, in order to make it easier for you to get a UAN , and without your employer's intervention, the EPFO now allows you to go online and generate a UAN on your own. This facility can be used by freshers, or new employees, who are joining the workforce as well as by employees who have older EPF accounts but do not have a UAN as yet. As a new employee, you can simply generate a UAN and provide the number to your employer at the time of joining, when you need to fill up forms for your EPF contribution. As per a circula...
Read more
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now