Reliance Growth Fund: Invest through SIP

Reliance Growth Fund: Invest through SIP

Investors can continue to hold the units of Reliance Growth Fund, while those with a penchant for risk can consider fresh investments by way of SIP (Systematic Investment Plan), going by its long-term track record in delivering strong returns.

The fund has outperformed its benchmark, the BSE 100, over one, three- and five-year periods. Reliance Growth has managed extremely good returns during boom periods in the market. While downside containment was an issue during protracted corrections, the fund has managed to improve on this count in recent times.

Though the fund did start out with a mid-cap focus, an increasing asset size and higher market volatility has seen the fund shift a larger portion of its portfolio to large-cap stocks in recent times. The fund may suit investors seeking to add a flexicap fund to their existing portfolio.

Reliance Growth has been among the top few performers in the diversified funds category over several years, helped mainly by its higher allocations to mid-cap stocks in the bull market. The returns delivered by the fund over a five-year period, at a compounded annual rate of 22.3 per cent, are better than most diversified large-cap funds.
During the bull-run of 2003-07, the fund managed a whopping compounded annual return of over 72 per cent.

During the market downturns in 2004 or 2006, it tended to lag its benchmark or peers during corrective phases. But in the market corrections in early 2007 and in 2008, the fund has improved significantly on this aspect and has contained losses better than its benchmark.
This has been possible largely because, from investing over 40 per cent of its portfolio in mid-cap stocks in 2007, the fund has brought mid-cap allocations down to 27 per cent levels. Portfolio
In recent times, the fund has considerably increased exposure to defensive sectors. The sectors that were hot favourites during the bull-run, such as capital goods, construction, and metals, have seen exposures reduced. Instead, the fund’s recent portfolio indicates that pharma, consumer non-durables and software are now among the top few sectors held.Fund Facts
The NAV per unit of the growth option is Rs 199.7.

Mr Sunil Singhania manages the fund.