The Hindu Business Line : Reliance Vision: Invest

Investors wishing to take advantage of recent market declines to build an equity portfolio can buy units of Reliance Vision Fund, considering its good long-term track record. The fund’s large-cap focus may make it better placed to tide over current market volatility.

But being a diversified fund which has exposures to contrarian sectors, further investments may be considered through the SIP (systematic investment plan). This may help you gain from any appreciation in the event of upside or alternatively, average your cost during downside.

The fund has, in its 12 years of existence, been able to deliver market-plus returns on a regular basis, especially over the last five years.

Performance and Suitability: Reliance Vision may be held as a part of the core portfolio on the basis of its long-term returns record. The fund is suitable for investors requiring a large-cap focus and a diversified portfolio. The fund has delivered 54 per cent and 39 per cent compounded annual returns over five- and three-year periods. During these time-frames, the fund has consistently bettered its benchmark BSE-100. The company has lost over 28 per cent of its NAV in the January-March period corrective phase. In such phases, it may be better to make monthly or quarterly investments to take advantage of lower NAVs. The large-cap focus also appears to be a positive under the uncertain market conditions prevailing at present.

Large-caps may be better placed for recovery compared to mid- or small-cap stocks due to greater liquidity as well as their better revenue visibility, in the event of a recovery.

Strategy: The fund has a compact portfolio of around 30 stocks. The exposure to specific stocks is also not concentrated and restricted to 6 per cent levels. In terms of sector exposures, the changes in the portfolio in the one-year period to February 2008 bring interesting aspects to the fore.

Except banks (where exposure has been increased) and capital goods, the sectors that had a good run last year, all the other top sectors held appear contrarian. These include software, pharmaceuticals, automobiles and telecom services. The NAV per unit is Rs 200.

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