The Hindu Business Line : Reliance Vision: Invest in phases

INVESTORS who wish to enhance their exposure to large-cap stocks can consider adding Reliance Vision Fund to their portfolio. Reliance Vision has emerged as one of the top-performing large-cap funds over a one-year period.

It also sports a good long-term track record. As there has been a sharp rise in equity prices in recent weeks, investments can be made in phases by way of a systematic investment plan, to reduce the downside risk from poor timing of investments.

Suitability: The fund has a large-cap bias. However, a couple of mid-cap stocks also figure in the portfolio and have perked up returns.

The fund's strategy places greater importance on focused sector and stock selection than on a well-diversified portfolio; and this has paid off for the fund, so far.

Performance: The fund has delivered a return of 66 per cent over the past year, beating the benchmark indices by more than 15 percentage points.

Over a three-year period, the fund has delivered an annual return of more than 50 per cent, though much of this was due to its superior performance in 2002 and 2003.

Stocks such as Siemens, Bharat Forge, TV-18 and Gujarat State Fertilisers, which were present in its portfolio a year ago, have delivered handsome returns.

Portfolio overview: Compared to a year ago, the fund appears to take more focused exposures to sectors. The top three sectors account for about 40 per cent. The holdings in stocks are also concentrated at the top. The top ten holdings account for about 55 per cent of the assets. This is normally the case with large-cap funds.

The fund appears to shuffle its sector preferences frequently. For instance, in June 2004, the top two sectors were auto and steel. In December 2004, the top sectors were electrical components and pharmaceuticals. The top three sectors are now capital goods, banks and auto.

About 25 per cent of the assets are invested in mid-cap stocks. Prominent mid-caps that figure in the portfolio include Automotive Axles, TV-18, Hinduja TMT and Gujarat State Fertilisers.

On an average, stocks in the portfolio trade at a price-earnings multiple of 13, which is at a discount to the Sensex.

Fund facts: Reliance Vision was launched in 1995. The fund has an asset base of Rs 1,320 crore.

The fund offers dividend and growth options. The minimum investment amount is Rs 5,000.

The fund manager is Mr Sunil Singhania.

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page