Skip to main content

Mutual Fund Review: Reliance Equity Opportunity Fund

 

LAUNCHED in March 2005, Reliance Equity Opportunity Fund's objective enthused investors initially and so the fund managed to mop up more than 2,000 crore of assets under management (AUM) soon after its launch. However, the erratic performance of the fund has diminished its glory over the years.

PERFORMANCE:

Reliance Equity Opportunity has had a very crooked performance graph. The fund started off on a good note and became a top quartile performer in 2006.

 

   However, in the next two years, it failed to impress and underperformed the major market indices as well as the benchmark. In 2007, when market indices were at their peaks, the fund returned just about 47% against 60% by the benchmark BSE 100. In 2008, it fell more than the market indices and benchmark. When the market began to rally in 2009, the fund manager didn't seem to change the conservative investment strategy. The cash holdings continued to be more than 15% through the second quarter of 2009, thereby hampering the returns in the first half of the year. However, the fund manager made up for this lag in the second half. The fund generated an overwhelming return of 109 % as against 81% and 75% return by the Sensex and the Nifty, respectively. In 2010, the fund continued its electrifying performance as it generated as much as 30% return, which was double the return generated by the Sensex and the Nifty.

PORTFOLIO:

Reliance Equity Opportunity Fund is an opportunity grabber. The fund has the leeway to invest in both domestic companies and stocks listed outside India. There is no sector bias, nor any market capitalisation tilt for this fund, which comfortably holds 33 stocks as of January 2011.


   It started off with a focus on large-cap companies but gradually moved to smaller companies making it riskier when compared to other equity diversified funds. Currently, the top three sectors of the fund are services, financial and technology. Interestingly, the fund has an even mix of both conventional and nonconventional stocks. In service sector, the fund has invested in Trent, Shoppers Stop, Cox & Kings, Hindustan Media Ventures and Dish TV. In the healthcare space, it holds Divi's Laboratories and Aventis Pharma.


   Reliance Industries, which was an alltime favorite stock of the previous fund manager, no more finds space in the portfolio ever since the fund been taken over by its new manager. Some other stocks that were unique to Reliance Equity Opportunity Fund including Unichem Laboratories, Piramal Life Sciences, Hinduja Venture and Micro Ink are deleted from the portfolio.


   A few stocks that have been a part of the portfolio for more than three years now include ICICI Bank, SBI, Cummin India and HCL Technologies among others. The fund follows a buy-and-hold strategy and hence, the portfolio churning ratio of the fund is as low as 0.79 times. This is unlike a mid and small-cap fund, which generally requires more churning to generate additional returns.

OUR VIEW:

Notwithstanding its patchy performance record, the fund has been able to generate good returns. However, exposure to small and mid-cap companies increases the fund's risk quotient. The fund is suitable for investors looking for high returns at high risk.

 

Popular posts from this blog

ICICI Prudential Dynamic Plan Invest Online

Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Buy Gold Mutual Funds Leave a missed Call on 94 8300 8300   ICICI Prudential Dynamic Plan             Invest Online This fund does remarkably well during falling markets, but fails to show the same prowess during a rising market. The fund sticks to its mandate to adapt to the dynamic nature of the market by shuttling between debt and equity. It takes aggressive asset calls in equity when the market surges by investing in quality mid-cap stocks. At the same time, it adopts a defensive strategy by investing in debt and cash when markets get overvalued, making it a good long-term choice.     For further information contact Prajna Capital on 94 8300 8300 by leaving a missed call     Leave a missed Call on 94 8300 8300   Leave your comment with mail ID and we will ...

Financial Planner - Do Integrity & Dependability Check

How does one can find value proposition when it comes to financial planning, which is a new area? There is nothing to benchmark it with. So, how does one figure what is the right fee to pay? Look at what you want. You probably want to hire a financial planner to get a blueprint for your life ahead and want to know how to achieve your goals. For creating a tailor-made financial plan, our experience is that it takes 25-30 man-hours in all. Taking an average of Rs 500 per hour for hiring the services of a qualified financial planner like one who has a CFP(CM) certificate, the fee would come to Rs 12,500 to Rs 15,000. But the per-hour rate can be higher or lower depending on the process adopted, the experience and expertise of the planner, etc. That's how planners arrive at their fee. Now, is that value for money? For that you need to find out what benefits you would derive by engaging them. The financial plan will give you clarity, direction and pathway to achieve your goals. Th...

About CRISIL IPO Grading

CRISIL IPO (Initial Public Offering) Grading is an opinion on the fundamentals of the graded issue that reflects CRISIL's independence and expertise. This opinion is expressed as a relative assessment in relation to other listed equity securities in India. The assessment is based on a grading exercise carried out by industry specialists from CRISIL Research. A CRISIL IPO Grade 5/5 indicates strong fundamentals and a CRISIL IPO Grade 1/5 indicates poor fundamentals. CRISIL IPO Grading reflects its assessment of the graded company's equity fundamentals as distinct from an assessment of debt fundamentals. A CRISIL IPO Grade should not be construed to mean a comment on the price of the graded security nor is it a recommendation to invest or not to invest in the graded security. However, this grade is not an opinion on whether the issue price is appropriate in relation to the issue fundamentals. The grade is not a recommendation to buy / sell or hold the graded instrument, or a comm...

Mutual Fund Review: ING Dividend Yield

  ING Dividend Yield's small assets enable the fund manager to churn in impressive returns… Strategy The aim of the fund is to invest in stocks which offer a high dividend yield. This fund deploys a value based strategy which aims to gain from investing in fundamentally strong and free cash flow generating businesses. The scheme focuses not only on growth but also on the cash generated by the business, which mostly leads to stable returns even in volatile markets. This fund has a low volatility because of its investment in high yielding stocks. The scheme tries to include stocks that yield dividend above the dividend yield of the Nifty and stocks with liquidity, which throws up a universe of 150 stocks.   Our View Launched in October 2005, this fund invests at least 65 per cent of its assets in high dividend yield stocks. The fund has consistently maintained a mix of stocks across varying market capitalisation, with a higher tilt to mid caps compared to small caps. Howev...

Understanding Your Cibil Credit Information Report

   WE ARE all familiar with the anxiety and uncertainty that we feel when applying for a loan. After all, it's the lender who decides whether we can own our dream home, our first car, or whether our children can pursue higher education. In a nutshell, a better life depends on the lender's decisions.    While other factors do play a part in the lender's decision, the Cibil Credit Information Report ( CIR ) plays a crucial role in a lender's decision to approve a loan application.    Previously, lenders would treat all loan seekers equally. Each applicant, if approved by the lender's internal credit policy, would be charged at the same interest rate for a particular loan size and purpose. The lenders would charge a higher interest rate to all the borrowers, in order to compensate for the possible default of a small portion of the loan disbursed. In other words, it's like a professor (the lender) punishing an entire class (borrowers) for the mischief played b...
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