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S. Vaidya Nathan

INVESTORS with a penchant for high risk can contemplate exposures in Reliance Vision Fund. It has a good track record, especially over the past three years.

The fund is aggressively managed and has taken advantage of market trends by a high degree of profit booking and portfolio churn. Investments can be made in a phased manner to benefit from any price weakness in the broad market.

Reliance Vision has been among the top performers in the bull market of 2003. Recording returns of about 140 per cent, the fund has done well post its focus on several large-cap stocks. Its performance has been consistent across quarters over the past three years.

The annual return since its launch in 1995 is about 25 per cent with a sizeable proportion sourced from the performance of the past year.

Suitability: Reliance Vision has a diversified portfolio without any concentrated sector exposures. The sector exposure has been capped at 10 per cent with only a few accounting for more than 5 per cent of assets. Much the same holds true for stocks with the top five holdings accounting for 25 per cent of net assets.

What enhances the risk profile is the aggressive nature of fund management. The fund has delivered returns that more than compensate for the risk element involved. Investors can choose the dividend option as the benefit of tax exemption may be extended when the Budget is presented in a few months. The dividend option will also enable investors to take cash out to capitalise on NAV gains.

Portfolio overview: The portfolio has a mix of large-cap and mid-cap stocks with the former dominating the top holdings. Pharmaceutical, steel, engineering, auto and chemicals form the top sector exposures. The prominent mid-cap stocks are Ashok Leyland, Sesa Goa, Television 18, Divi's Labs, Bharat Forge and Great Eastern Shipping.

The fund has focussed on mid-cap export plays in the pharma sector such as Lupin and Aurobindo apart from Divi's. The portfolio appears well placed to benefit from the broad-based growth in the economy as well as the firm trends in commodity prices.

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