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Flexibility Pays

This fund has been climbing the performance chart quite rapidly, thanks to its assorted portfolio of large and mid-caps. Return of 155 per cent in 2003 is a proof of this. Reliance Vision can be a fund of choice for many investors.

When this fund reached the top of the performance chart in 2002, many investors and observers thought it was a flash in the pan. However, by repeating this feat for the second year running, Reliance Vision has proved its sceptics wrong. The fund's flexible strategy of making a foray into large as well as mid-cap stocks has worked quite remarkably. Return of 155.16 per cent in 2003 is a proof of this.

Reliance Vision scouts for companies with sound fundamentals, irrespective of their market capitalisation. Although mid and small-cap stocks have ruled its portfolio, the fund has managed risk quite effectively through diversification. Its exposure to a single sector has largely been limited to 15 per cent. However, its portfolio turnover has been on the higher side, as it believes in booking profits.

The real momentum in this fund came after 9/11 when higher exposures in hot sectors -- PSU and tech -- did the trick. Prior to this, Reliance Vision was an average performer in the category. Through the first half of 2001, exposure to large-cap FMCG, healthcare and cement stocks like Nestle, Cipla and ACC failed to save it from incurring losses. However, in mid 2002, it took a liking to mid-caps, which coincided with the mid-cap rally. The fund's substantial exposure to stocks like Bharat Forge and Bharat Electronics helped it deliver ballistic returns through 2002. Interestingly, during the dull phase of 2002 (February-October), it put up an amazing performance-while the category was down 12.6 per cent, Reliance Vision gained 21.4 per cent.

Year 2003 has also turned out to be an excellent year for this fund. Thanks to solid stock picking, the fund's higher exposure in bank and healthcare stocks has been a boon. Top holdings SBI, Canara Bank and Divi's Lab have made substantial gains during the period. In the subsequent bull run, its mid-cap loaded portfolio worked in its favour and stocks like Ashok Leyland and Bharat Forge have more than doubled. Its big positions in large-caps like Reliance Industries and Maruti Udyog have also paid off.

In a nutshell, Reliance Vision largely focuses on spotting companies that are available at a good price. In the absence of such companies, it doesn't hesitate to sit on cash. This can be a fund of choice for many investors.