Reliance Focused Equity Fund: Has change in scheme's mandate made it riskier?

ET Wealth collaborates with Value Research to analyse top mutual funds. We examine the key fundamentals of the fund, its portfolio and performance to help you make an informed investment decision.

How has the fund performed?
With a 10-year return of 15.27%, the fund has outperformed the benchmark index (9.52%) and mirrors the category average (15.81%).

The fund has comfortably beaten its benchmark index over the past decade.


Annualised performance (%)
The fund’s return profile is on a par with its category average.

As on 12 June 2018

Yearly performance (%)
The fund has underperformed in recent years.

As on 12 June 2018

Basic facts
Date of launch: 26 Dec2006
Category: Equity
Type: Mid cap
Average AUM: Rs 4,490.74 crore
Benchmark: S&P BSE 500 index

What it costs
NAVs*
Growth option: Rs 47
Dividend option: Rs 22
Minimum investment: Rs 5,000
Minimum SIP amount: Rs 100
Expense ratio^ (%): 2.04
Exit load: 1% For redemption within 365 days
*As on 12 Jun 2018
^As on 30 Apr 2018

Fund manager: Vinay Sharma
Tenure: Just appointed
Education: B.ARCH & PGDCM

Where does the fund invest?
The fund has taken a large cap tilt in recent months.

The fund’s portfolio is heavily skewed towards financials.

The fund has taken large positions in its top bets.

How risky is it?
The fund has been quite volatile due to its focused strategy.

Based on 3-year performance. Data as on 31 May 2018

Wherever not specified, data as on 30 May 2018. Source: Value Research

Should you buy?
This fund is a result of the merger of Reliance Mid & Small Cap with Reliance Focused Large Cap. It will retain the latter’s focused approach—investing in up to 30 stocks—but with no particular market-cap bias. The fund is now distinctly tilted towards largecaps, as many of the mid- and small-cap positions were culled during the merger process. With a sharp skew towards the financial sector and heavy tilt in favour of its top bets, the fund has taken on increased concentration risk. The merger and style change (of Reliance Mid & Small Cap)makes its performance history irrelevant, but even prior to its repositioning, the fund didn’t have a consistent record of outperformance. Investors may wait for the fund to build a track record under the revised mandate.