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The Real Visionary

A true go-anywhere multi-cap fund. Aggressive investors willing to wait for the long-term may find this offering to their liking

Reliance Vision has generated outstanding returns for its investors through shuffling the portfolio among large-, mid- and small-cap stocks. In the five-year period ended June 19, 2006, it's the second best fund with returns of over 57 per cent, way ahead of any other fund with a similar portfolio. A five-star rating since October 2002 speaks volumes about the fund's consistency and superior risk-return proposition.

With active stock specific calls and a portfolio spread over 30 stocks, the fund's aggression might not be the right recipe for conservative investors. Still, those who can keep their nerves are likely to be handsomely rewarded here. This fund is not a great believer in the buy-and-hold strategy. On the contrary, it believes in opportunism and trades frequently. The fund normally maintains high cash allocation to capitalise on the short-term opportunities.

Year 2002 stands out in the fund's excellent performance track record. After two bad years, equity funds were on a consolidation mode. However, Reliance Vision had a different plan. The fund churned its way to generate a massive 74.58 per cent return as against a modest 19.43 per cent rise of an average peer. The second best (Reliance Growth) was way behind with returns of 55.75 per cent. Critics who dismissed this as an one-off performance were in for yet another surprise the next year when the fund fired with a mid-cap-heavy portfolio to generate a top quartile return of 155 per cent compared to the category average return of 112 per cent. Exposure to banks and healthcare stocks helped.

Year 2004 proved to be depressing as the fund could manage only 19.81 per cent against the category average of 25.92 per cent. High allocation to mid-caps in the first quarter lead to a poor performance - the fund slipped nearly 8 per cent against the category average fall of 4.11 per cent. It was back on track in 2005 with returns of 53.47 per cent against average peers' 46.67 per cent gain. Its auto and basic engineering holdings clicked.

This year, the fund has so far added in excess of 36 per cent by focusing on large-cap stocks, which are back in focus after a long time.

Reliance Vision looks to be a complete fund. Management's courage to take aggressive stock-specific calls, the go-anywhere approach and a long history of good performance make it one of the finest options in the equity funds' category.