A Winner All The Way

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While the markets have rallied since March 2009 on the global front, the Sensex is currently close to breaching the 17,000 level. However, there are concerns about whether the markets will sustain such levels going forward owing to the fairly stretched valuations as compared to their global peers. In such a case, it is better to be safe than sorry by selecting a fund that has a good and consistent track record over the years. This particular fund seems to be a good bet considering that since its inception in November 2004, it has consistently managed to outperform its category average returns, except for CY07. While considering the current valuations, one should go about investing in the fund with value investment planning (VIP) or buy during every dip in the market.

During the meltdown in the global equity markets in 2008, the fund managed to buffer its losses better than its category. In CY08, the fund recorded a fall of 53.69 per cent in its net asset value, while the category average fell by over 55 per cent. This fund is amongst the top performers in the one-year performance record among the diversified funds’ category wherein it has managed to beat the category returns by a massive score of 2,443 basis points. Such commendable performance by the fund is attributed to its portfolio strategy of investing in the top 200 stocks in terms of market capitalisation with growth bias and timely portfolio calls.

In August 2009, the fund’s top three sectors – banking, IT and pharmaceuticals together contributed over 33 per cent of the total sector allocation. For the 24 stocks’ portfolio, the top ten stocks together contributed almost 48 per cent of the total assets. The fund’s portfolio risk seems quite balanced considering its concentrated stock calls and fairly defensive sectoral and market-cap allocation.  Besides, despite its higher exposure in the large-cap space that stood at 59 per cent of its portfolio, the fund managed to outperform. And this comes at a time when currently mid and small-cap stocks have outperformed the large-cap ones. The fund manager has taken a timely call of moving out of cash and equivalents that stood at over 37 per cent in February 2009 and currently is at a marginal 8.42 per cent of the total assets. Such accurate calls on the asset allocation front and judicious stock selection prove the mettle of the fund manager.

Omprakash Kuckian has been managing this fund since its inception, ensuring stability and consistency in the fund’s performance. And since inception the fund has unfailingly beaten its benchmark returns. Omprakash has over 18 years of experience in managing investments and at Reliance AMC he manages three other funds that include Reliance Regular Savings – Equity, Balanced and Reliance Equity. And out of the four funds managed by Omprakash, three funds have managed to outpace their category returns by huge margins. Considering the fund’s asset allocation strategy, moderate risk investors can buy the fund in a staggering manner.