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Fund Focus: The Real Visionary

A true go-anywhere aggressive multi-cap fund that has delivered outstanding returns consistently

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 23, 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 inves-tors. During the stock markets turmoil in May-June, the fund shed 25.93 per cent, marginally less than category average return of negative 26.10 per cent. 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. 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.