Reliance Equity Opportunities Fund Invest Online

Invest In Tax Saving Mutual Funds Online

Download Tax Saving Mutual Fund Application Forms

Buy Gold Mutual Funds

Call 0 94 8300 8300 (India)

 

Reliance Equity Opportunities Fund

Reliance Equity Opportunities is an equity diversified fund with monthly average assets under management at Rs 5,006 crore, as on June, 2013. The fund’s portfolio has a tilt towards large- and mid-cap companies. The fund was launched on March 2005 and it has been benchmarked against the S&P BSE 100.

Performance

The fund’s performance has been a laggard in Year-to-date (June 30, 2013) as it fell to fourth quartile within the category; this period has witnessed under performance among the funds which were heavy loaded with mid-cap stocks.

	Scheme Name		YTD		1 Year		3 Years		5 Years		Since Inception
Reliance Equity Opportunities Fund(G)		-9.60		7.61		6.77		16.58		18.31
S&P BSE 100		-2.90		9.94		1.95		7.32		13.62
Average		-7.25		7.40		1.56		8.59
Rank of the fund		107/145		78/144		8/133		1/115

Figures in % as on June 30, 2013; Returns above 1-year in CAGR (Compounded Annual Growth Rate) terms; YTD* – Year to date (it represents returns between January 1, 2013 to June 30, 2013)

During calendar years 2008 the fund was in the third quartile among its peer-set of equity diversified funds. Other than that it has managed to maintain its position in the top two-quartiles in most of the years. Especially in a bull market the fund has given outstanding returns.

	Scheme Name		2008		2009		2010		2011		2012
Reliance Equity Opportunities Fund(G)		-55.98		103.78		30.45		-21.63		47.35
S&P BSE 100		-55.49		80.3		15.66		-25.73		29.96
Category Average		-55.76		83.41		19.35		-24.09		33.81
RANK		63 / 113		17 / 126		6 / 135		41 / 143		14 / 148
Absolute returns

Absolute Returns; Figures in %

Risk. In terms of measures of risk such as standard deviation and beta (measured over last three years), the fund has so far taken slightly lower level of risk compared to the category median.

	Scheme Name		Standard Deviation		Beta
Reliance Equity Opportunities Fund(G)		0.940		0.788
Category Median		0.941		0.811
Average over the last three years

Risk-adjusted Returns. In terms of measures of risk-adjusted return such as Treynor ratio and Sharpe ratio (measured over last three years), the fund has given a higher risk-adjusted returns compared to the category median.

	Scheme Name		Treynor		Sharpe
Reliance Equity Opportunities Fund(G)		0.033		0.030
Category Median		0.003		0.007
Average over the last three years

Processes

Reliance Equity Opportunities Fund is multi-cap equity diversified fund. The fund’s investment strategy allows it to invest in stocks across market capitalization. According to the SID, "The primary approach to stock selection will be through the top-down approach viz: Sector -> Industry -> Company. The fund would not only restrict itself to the 'Top down Approach' but on a case to case basis will also adopt the 'Bottoms up approach' viz: Company -> Industry -> Sector." Therefore, based on perception of the Fund Manager, the fund will decide on the investment strategy.

The fund manager has been given freedom In terms of the choice of instruments as well has full discretion to invest even in foreign securities or debt instruments. It can also take exposure to derivatives. Therefore, there are a lot of liberties that can be used by a capable fund manager to create a long term track record

This fund has a lower expense ratio at 1.75 per cent; this is 77 basis points less than the median expense ratio for the category of equity diversified that stands at 2.52 per cent. This may be possible due to the large size of the fund.

The fund’s exit load policy is similar to the most of the peer funds i.e. 1 per cent exit load if the investor redeems or switches out within 1 year from the date of allotment. Any redemption or switches after one year has does not levy an exit load.

Portfolio

As of May 2013, the fund has a little over 60 stocks in its portfolio against the category median of 43. Its average portfolio allocation since 2012 has been 48 stocks. Prior to March 2012 (over a three period), the fund had maintained equity count at an average of 34 stocks. It has increased the number of stocks with a higher AUM.

In the last five years (between June 2008- May 2013), the fund has had an average exposure of 53 per cent to large-cap companies. During this period average exposure to mid-cap companies was at 33 per cent and approximately 2 per cent to small caps. Its exposure to the other equity – consisting of derivatives, preference shares, warrants etc. – stood at approximately seven per cent. Its average exposure to cash and cash equivalents during this period has been seven per cent.

As on May 2013, exposure to large-cap was at 64 per cent, mid-cap level was at 33 per cent, small cap is 0.56 per cent and exposure to others (including cash and CBLO) was at 1.52 cent. It has no exposure to other equity.

The top five sectors in the portfolio as of June 30, 2013 had an allocation of 57.25 per cent. These include Banks, Pharmaceuticals, Software, Industrial, Media and Entertainment; within banks PSU Banks appear to have a higher proportion. In the last 12 months (July 2012-June 2013) a total of 32 stocks have appeared in all months, and together they have accounted between 74-to-86 per cent of the portfolio. Divis Laboratories has accounted for the highest concentration in most of the months, except December 2012 and January 2013, when SBI and Infosys had the highest allocation respectively.

Cyclical stocks had exposure levels of 55-to-63 per cent over the last 12 months. This was followed by Services where the exposure moved between 17-to-24 per cent and 13-to-17 per cent was in defensive stocks.

A high exposure to midcaps and to cyclical in general may have resulted in the underperformance of this fund. For a fund scheme with AUM of Rs 5,000 crore, an exposure of 35 per cent to midcap and small caps with a limited number of stocks will pay off if the picks have a good number of multi-baggers. This is not so visible in the portfolio as of now. We will therefore need to wait and watch, unless the fund manager chooses to churn the portfolio for more promising picks.

Fund Manager

The fund has been managed by Shailesh Raj Bhan who has been in charge since its inception in March 2005. Bhan has been with Reliance AMC since 2003. Prior to his current assignment, he worked for firms like Emkay, Shah & Sequeira and ICFAI. He is assisted by Viral Berawala who began working on this fund from September 2010.

In addition to Reliance Equity Opportunities, Shailesh Raj Bhan also looks after Reliance ELSS-I and two sector funds (one focused on media and entertainment and the other on pharmaceuticals).

View

The fund doesn’t have a fixed strategy and is highly dependent on the fund managers’ ability. Bhan’s has outperformed in various years. Although looking at the fund’s performance it seems the fund is a good choice during bull markets like the ones we saw in 2009, 2010 and 2012, where it outperformed the benchmark and was also among the 20 funds among its peer.

Considering the high volatility in the market and recent underperformance could result in an average or sub-optimal performance in the near term or till the time that the market does not get into an sustained upswing. Since Bhan is at the helm it is likely that it will outperform once the market starts ascending. Anyone looking for a growth fund which can capture performance in a rising market and has a moderate to higher risk appetite could consider investing in this fund.

Happy Investing!!

We can help. Call 0 94 8300 8300 (India)

Leave your comment with mail ID and we will answer them

OR

You can write back to us at PrajnaCapital [at] Gmail [dot] Com

---------------------------------------------

Invest in Tax Saving Mutual Funds ( ELSS Mutual Funds ) to upto Rs 1 lakh and Save tax under Section 80C.

Invest Tax Saving Mutual Funds Online

Tax Saving Mutual Funds Online

These links can be used to Purchase Mutual Funds Online that are regular also (Investment, non-tax saving)

Download Tax Saving Mutual Fund Application Forms from all AMCs

Download Tax Saving Mutual Fund Applications

These Application Forms can be used for buying regular mutual funds also

Some of the best Tax Saving Mutual Funds available ( ELSS Mutual Funds )

1. ICICI Prudential Tax Plan Invest Online
2. HDFC TaxSaver Invest Online
3. DSP BlackRock Tax Saver Fund Invest Online
4. Reliance Tax Saver (ELSS) Fund Invest Online
5. Birla Sun Life Tax Relief ‘96 Invest Online
6. IDFC Tax Advantage (ELSS) Fund Invest Online
7. SBI Magnum Tax Gain Scheme 1993 Invest Online
8. Sundaram Tax Saver Invest Online
9. Edelweiss ELSS Invest Online

------------------

Best Performing Mutual Funds

1. Largecap Funds Invest Online
1. DSP BlackRock Top 100 Fund
2. ICICI Prudential Focused Blue Chip Fund
3. Birla Sun Life Front Line Equity Fund
2. Large and Midcap Funds Invest Online

1. ICICI Prudential Dynamic Plan
2. HDFC Top 200 Fund
3. UTI Dividend Yield Fund
2. Mid and SmallCap Funds Invest Online

1. Reliance Equity Opportunities Fund
2. DSP BlackRock Small & Midcap Fund
3. Sundaram Select Midcap
4. IDFC Premier Equity Fund
3. Small and MicroCap Funds Invest Online

1. DSP BlackRock MicroCap Fund
4. Sector Funds Invest Online

1. Reliance Banking Fund
2. Reliance Banking Fund
5. Tax Saver MutualFunds Invest Online
1. ICICI Prudential Tax Plan
2. HDFC Taxsaver
3. DSP BlackRock Tax Saver Fund
4. Reliance Tax Saver (ELSS) Fund
6. Gold Mutual Funds Invest Online

1. Relaince Gold Savings Fund
2. ICICI Prudential Regular Gold Savings Fund
3. HDFC Gold Fund