Skip to main content

Mutual Fund Review: Reliance MIP

 

 

Smart bets on the debt portfolio added zing to Reliance MIP's performance over the past five years

This fund has managed to be a top quartile performer in four years, out of the five of its existence. And while investors may encounter hiccups, it has the ability to bounce back.

Since its launch to 2006, the fund's average portfolio maturity was in line with the category average, barring slight deviations. From 2007 onwards, the fund manager has played opportunistic bets. In the second half of 2007, he began to increase the average maturity from 2.52 years (June 2007) to 7.99 years (March 2008). The category as a whole moved much more gradually. Although, 10-year benchmark yields came down slightly in the second half of 2007, it started moving up from January 2008. With no interest rate cut in the credit policy review of January 2008, yields moved up and the fund got hit in the first quarter that year.

But that did not stop the fund from delivering an enviable 9.57 per cent return (category average: -3.42%) in 2008, which bagged it the No. 4 slot (out of 59). While equity allocation fluctuated between 20 per cent and 6.74 per cent, it was the bets on the debt portfolio that made its day. When the yields began to decline towards the end of 2008, the fund manager increased the average maturity of the portfolio from 1.27 years (June) to 10.24 years (December). The category average maturity increased from 1.48 years to 3.34 years over the same period.

 

The fund's equity allocation fluctuates. Its fund manager also actively churns his portfolio among stocks of all market caps. While earlier it was aggressive on the equity front, now it has a more diversified portfolio. Currently, the fund holds 34 stocks in its equity portfolio with none accounting for more than 1 per cent of the portfolio, while earlier there have been instances of allocation to a single stock going up to around 7 per cent (April 2006).

If one looks at the quarterly performances, there are a lot of ups and downs, as a result of which the dividend too fluctuates. However, a look at the annual performances and returns over a longer period indicate that it evens out. While the amount of dividend declared varies, the fund has managed to declare one in 65 months out of the 77 of its existence.

 

Over the past six months there has been a welcome dip in its expense ratio from 2.02 per cent to 1.61 per cent, below the category average of 1.72 per cent.

Popular posts from this blog

Surrender ULPPs

  ICICI Pru LifeTime and ICICI Pru Lifestage are Unit Linked Pension Plans. Such insurance linked retirement plans are neither good investments nor do they offer sufficient insurance cover. As you can see, these have turned out to be bad deals. In the Lifetime plan, the fund value is not even equal to the total premiums that you have paid and in the Lifestage plan your return is just about 6% which is quite low. The mortality charges are as per your age which is why they have increased. Moreover, once these plans matures, you will have to compulsorily opt for annuity (regular income) and the annuity rates are generally modest. Assuming these plans mature in the next one year, it will be wise to surrender the plan now and curb your future commitments.   Before you choose to buy a term plan, you have to consider a few points. You need to insure yourself, only during the time you are working and your family is financially dependent on you. At the age of 59, not all insurance companies w...

Sundaram Mutual Fund new plan Sundaram Fixed Term Plan CJ

Sundaram Mutual Fund has announced the launch of a new fund named as Sundaram Fixed Term Plan CJ. The new issue will be closed for subscription on January 30. --------------------------------------------- Invest in Tax Saving Mutual Funds ( ELSS Mutual Funds ) to upto Rs 1 lakh and Save tax under Section 80C.   Invest Tax Saving Mutual Funds Online Tax Saving Mutual Funds Online These links can be used to Purchase Mutual Funds Online that are regular also (Investment, non-tax saving)   Download Tax Saving Mutual Fund Application Forms from all AMCs Download Tax Saving Mutual Fund Applications   These Application Forms can be used for buying regular mutual funds also   Some of the best Tax Saving Mutual Funds available are: 1. HDFC TaxSaver 2. ICICI Prudential Tax Plan 3. DSP BlackRock Tax Saver Fund 4. Birla Sun Life Tax Relief '96 5. Reliance Tax Saver (ELSS) Fund 6. IDFC Tax Advantage (ELSS) Fund 7. SBI Magnum Tax Gain Scheme 1993 8. Sundaram Tax Saver   -...

Group Health Insurance

Buy Group Health Insurance Online   For Human Resources, the biggest challenge today is to decide whether medical benefits should be offered to employees or not, what type of plans should be offered, what will be the cost and how will the cost be split between employees and employer. Well, most of these are subjective and would depend on a lot of factors including company size, average employee salary, etc. However, this article will give you a fair idea on how you should go about deciding these factors: 1. Why offer group health insurance benefit to employees : Studies have proved that retention rates among employers offering GHI are much higher than the ones who are not offering. Moreover, the cost of providing this benefit as a percentage of salary is very low as compared to the perceived value. As an example, say if average salary of an employee in your organization is 4 LPA. If you decide to offer a health insurance benefit to him for a Sum insured of ...

Choose gold ETF over Physical Gold

Investing in gold is overall a good portfolio hedging strategy as long as gold does not account for more than 5-10 per cent of your investment portfolio. Between physical gold and gold ETF, investing in gold ETF is a better proposition because these funds invest in physical gold making them the closest to investing in physical gold at no risk of holding physical gold.   You will need to have a demat account to invest in gold ETFs and there is little to choose between any of the gold ETFs, you can pick any fund that you wish to as long as you pick the fund with the lowest expense ratio.   -----------------------------------------------------------------   Also, know how to buy mutual funds online:   1) DSP BlackRock Mutual Funds: http://prajnacapital.blogspot.com/2011/05/buying-dsp-blackrock-mutual-funds.html   2) Reliance Mutual Funds: http://prajnacapital.blogspot.com/2011/06/buying-reliance-mutual-funds-online.html   3) Reliance Mutual Funds: http://prajnacapital....

Commercial Paper (CP)

Invest Mutual Funds Online Download Mutual Fund Application Forms Commercial Paper (CP): These are issued by corporate entities in denominations of Rs.2.5mn and usually have a maturity of 90 days. CPs can also be issued for maturity periods of 180 and one year but the most active market is for 90 day CPs.   Two key regulations govern the issuance of CPs-firstly, CPs have to be compulsorily rated by a recognized credit rating agency and only those companies can issue CPs which have a short term rating of at least P1. Secondly, funds raised through CPs do not represent fresh borrowings for the corporate issuer but merely substitute a part of the banking limits available to it. Hence, a company issues CPs almost always to save on interest costs ie it will issue CPs only when the environment is such that CP issuance will be at rates lower than the rate at which it borrows money from its banking consortium. ----------------------...
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