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Indian equities have had a stellar rally over the last 18 months. So, if you think the market will consolidate from here and are looking to contain the downside once the going gets turbulent, Reliance Top 200 is one scheme you could consider.
Launched as ‘Equity Advantage’ in 2007, the fund’s attributes were changed and the scheme was renamed in 2011.
Its consistency has improved after the makeover: restricting investment to stocks with market capitalisation in the range of the BSE 200 Index.
For instance, from inception to August 2011, the fund’s one-year return was better than its benchmark about 65 per cent of the time. But after the change in mandate, the figure has improved to 77 per cent.
The scheme has delivered top quartile returns across one-, three- and five-year periods and has not just bettered its benchmark but also peers, such as HDFC Top 200 Fund and ICICI Prudential Top 200 Fund.
Investors with a moderate risk appetite and three- to five-year investment horizon could consider parking a portion of their surplus in Reliance Top 200 Fund.
Portfolio makeoverThough Reliance Top 200 seeks to limit itself to stocks that are part of the benchmark, it does take a few active calls outside the BSE200 Index.
Shopper’s Stop, Oriental Bank of Commerce and Indian Hotels are some examples. In the past, the fund has managed to contain the slide in NAV during market falls reasonably well.
It has been able to deliver returns higher than its benchmark, the BSE 200 Index, during rally phases too.
Reliance Top 200 Fund had meaningful exposure in multi-bagger stocks such as Bharat Forge and Alstom T&D.
In the past year, the fund has reduced its holding in defensive themes, such as IT and consumer goods. It has, however, increased weight in the pharma sector by adding stocks such as Cipla and Ranbaxy to its basket and this has helped the fund shore up performance.
The fund has increased exposure to cyclical themes, such as automobiles, industrial capital goods, oil and gas and cement.
Other stocks that the scheme loaded on in the past year and that have helped the performance, include Axis Bank, Castrol India and Federal Bank.
The fund held 36 stocks in its portfolio with a weighted market capitalisation of ₹1.1 lakh crore as of March 2015.
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