Reliance Vision: Hold

Unit-holders can retain their exposure to Reliance Vision Fund.

The fund's performance over the last year has been somewhat challenged, with the fund struggling to beat its benchmark, BSE 100. The fund returned about 6 per cent while the BSE 100 delivered about 8 per cent over a one-year period. The fund's returns compare poorly with peers such as DSPBR Top 100 and HDFC Equity.

While much of the underperformance came only in recent times, its performance since the March 2009 lows has not kept up with peers. The underperformance in the last six months appears more pronounced. Its performance over the next couple of quarters, therefore, would bear a close watch.

Fresh investments nonetheless can be avoided. Not only does the fund need to improve its performance, its not-so inspiring track record of containing downsides (during periods of short correction) also calls for restraint in the current market conditions. Its peers DSP BlackRock Equity and HDFC Top 200, on the contrary, have been swift in participating in market rallies and have also displayed restraint during market declines.

Performance: Reliance Vision's one-, three-, and five-year compounded returns stand at 6 per cent, 10 per cent and 11 per cent respectively. From the November highs in 2010, the fund has lost over 11 per cent while its benchmark's loss was pegged at about 8 per cent.

But to the fund's credit, it has an impeccable record of performance during secular bull rallies. The only exception being the initial setback it had suffered in the March 2009 rally, owing to its high cash allocation then. Nonetheless, it went on to deliver 82 per cent returns that year.

Portfolio: The portfolio sports about 26 stocks, with the top-10 accounting for little more than half of the basket. In terms of market cap exposure, large-cap stocks (market cap more than Rs 7,500 crore) continue to make up the core of its portfolio (about 85 per cent).

The fund's midcap allocation, however, has come down drastically. It now sports only one midcap and small-cap stock in its portfolio. The limited exposure to these market-cap segments may help, since large-cap companies typically are better-placed to tide over high-inflationary periods.

Pharma (specifically MNCs), banks and petroleum products make the top three sectors, accounting for almost half its net assets.

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