Reliance Growth has not only emerged as the largest mid cap fund but is also the largest equity diversified fund with AUM of over Rs 5,600 crore. The fund has been able to generate investor interest due to its impressive performance by beating its peers by an impressive margin for the past so many years.
After the 2001 dotcom crash, the fund made a smart comeback in 2002 with a return of 55.75 per cent, the second-best among the 59 funds. Since then it maintained a top quartile position for the next four calendar years. However, in 2006 the fund was ranked 53 among 145 funds with a return of 41 per cent.
In 2007, the fund's investors had a reason to cheer since the fund gave them a high return of over 76 per cent in the year consequently taking the fund's rank to 25 among the 162 funds. While the fund's allocation to large-, mid- and small-caps keep oscillating, during the past six months, the exposure to mid-cap stocks has increased from 43 per cent to over 50 per cent. In the past, the fund followed a strategy of buy-and-hold for some stocks, while in some it has gone for a quick profit taking. It is well known for its smart moves. In February 2006, the fund maintained highest exposure to technology and basic/engineering. Now energy and financial services sectors command the highest exposure of the fund Over the past one year the fund has also pared its exposure to auto and basic/ engineering sectors also.
However, being a mid-cap fund, fund's huge asset size can be a matter of concern. As of now, the fund boasts of one of the most enviable performance records even with its swelling size. But it remains to be seen whether it can continue to do so.
This article was originally published on April 25, 2008.
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