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Fixing Fallacy

Reliance Vision and Equity funds are similar and switching won’t make sense

I want to switch my investments from Reliance Vision Fund to Reliance Equity Fund as the former is not giving good returns. Please advice.

- Rabin Kumar

These funds are more similar than dissimilar. While Reliance Equity is a large-cap fund, which invests in the top 100 companies by market capitalization, Reliance Vision is a fund focused on large-caps with some exposure to mid- and small-cap stocks. The leeway with Reliance Vision to go beyond the top 100 companies is what puts it on the more aggressive side. So it’s not surprising to see Reliance Equity lose 44.85 per cent (13/193) in 2008 as compared to Reliance Vision’s loss of 51.92 per cent (69/193).

However, the latter performed better this year. As on August 31, 2009, the returns of Reliance Vision (55.69%) were higher than that of Reliance Equity (43.22%). But if one looks at the long-term performances, returns of Reliance Vision have taken a beating over the past 4 years.

Both these schemes are average performers with a 3-star rating. If you want to move out, then consider DSPBR Equity, HDFC Top 200, Birla Sun Life Frontline Equity, Reliance Regular Savings Equity, Reliance Growth and Sundaram BNP Paribas Select Focus.

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