Reliance Vision has proven to be a solid performer.
This large-cap offering is aggressively focused on 30-35 stocks on which the fund manager continues to place big bets. Naturally, each holding will have a significant effect on the fund's performance. A case in point is the rally in Divis Laboratories where the fund placed a gutsy 9.08 per cent of its corpus at one time.
Like its other siblings in the Reliance family, the fund does some astute stock picking. Added to it, the fund manager actively churns his holdings. Consequently, the fund works on a high cash strategy giving the fund manager ample leeway to chase opportunities.
With this fund, one can't help but get nostalgic about its past. The fund manager turned his peers green with envy when he delivered 74.58 per cent in 2002 (category average: 19.27 per cent). The next year, he flaunted a 155.16 per cent return (category average: 111.51 per cent). Its AUM began to climb on the back of this performance. Unfortunately, the new investors were a disappointed lot when the fund actually underperformed the category average by more than 6 per cent in 2004.
The years 2005 and 2006 see the fund shedding small caps and its corpus swelling from Rs 756 crore (December 2004) to Rs 2,600 crore (December 2006). But we also see the fund stabilising in its returns. It outperforms, but not glamorously.
Being a growth-oriented vehicle, one could expect it to suffer in an environment that's punishing growth stocks. But this fund will emerge to restore investors' wealth and confidence. If you don't fret during its off periods, you will find this a rewarding long-term investment.
This article was originally published on December 04, 2007.
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