Reliance Natural Resources Fund

Reliance Mutual Fund knocks with another open-end equity fund which will remain open for subscription for full one month from January 1 to January 30, 2008. As the name suggest, the investment universe of this scheme would primarily constitute of domestic companies which will be engaged in the discovery, development, production or distribution of natural resources. If permitted, a part of corpus may also be invested in foreign securities.

Scheme Details
Issue Opens: January 1, 2008
Issue Closes: January 30, 2008
Fund Category: Open-End, Equity Scheme
Benchmark Index: BSE 200 to the extent of 65 per cent of the portfolio and MSCI World Energy Index to the extent of 35 per cent of the portfolio
Minimum Investment: Rs.5000
Entry Load: For investment less than Rs.2 crores, an entry load of 2.25% will be charged. And for investment of Rs.2 crores and above but less than Rs.5 crores, an entry load of 1.25% will be levied.
Exit Load: Nil

About the Fund Manager
Ashwani Kumar, the fund manager is an experienced hand. In his earlier assignments, he has worked with Zurich Asset Management as Senior Research Analyst for 11 years. Besides this fund, he is responsible for a dozen other funds -- Reliance Equity Advantage Fund Inst, Reliance Equity Advantage Fund Retail, Reliance Index Nifty, Reliance Index Sensex, Reliance MIP, Reliance NRI Equity, Reliance Regular Savings Balanced, Reliance Regular Savings Debt, Reliance Regular Savings Equity, Reliance Tax Saver, Reliance Vision Inst and Reliance Vision

Reliance AMC
Reliance Mutual Fund was incorporated in June 1995 and it started its operation with Reliance Vision and Reliance Growth which were launched in September. Currently, it has assets worth Rs. 80,779.83 crore, out of which bulk has been contributed by the cash funds. Presently, Reliance Mutual Fund is the top fund house with maximum assets under management and it has remained there since March 2007.

Opinion
The fund family has some of the best performing equity funds. However, this particular fund is not a great idea simply because thematic and sector funds are not the best way to invest in equities. Also, a Reliance fund named 'Natural Resource Fund' is creating a certain amount of investor enthusiasm in confusion with the group's company named Reliance Natural Resources Ltd. A sizable initial mobilisation could make deployment challenging. This will also mean quick deployment of a large corpus in a restricted universe of shares. All these factors could be an impediment to its performance. Thoughtful investors should avoid this fund and instead consider funds with proven credentials like Reliance Vision and Reliance Growth. Those two appear to capture the best investment ideas of this fund house in a time-tested manner.