Reliance Top 200: Invest :: Business Line

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Investors can buy the units of Reliance Top 200, a large-cap oriented equity fund. From time to time, though, the fund adds a few mid-cap stocks to the mix, which pegs up its risk profile. Further, while the fund benchmarks itself against the BSE 200, and by name appears to invest in the top 200 stocks, a part of the portfolio is invested in stocks outside the BSE 200 basket too.

The share of stocks such as these in the portfolio has ranged 3-14 per cent over the past three years. The fund is suitable for those who can stomach marginally higher risks compared with large-cap schemes.

PERFORMANCE

On a daily rolling return basis over the past five years, the fund has done better than its benchmark three-quarters of the time. The past year has seen the fund generate a return of 18 per cent, beating its BSE 200 benchmark’s 11 per cent by a wide margin. This, it achieved by hiking holdings in top-performing mid-cap stocks such as Hathway Cable & Datacom, Max India and Shoppers Stop.

Over a three- and five-year period too, the fund has done better than its benchmark, though by a far thinner margin of 4 and 3 percentage points. Still, the fund is among the better performers in the large-cap category.

PORTFOLIO

The fund has stayed true to its large-cap focus over the past six years, dipping markedly into mid-cap stocks only from early 2012. This has certainly helped push fund returns over the past year, given the superlative runs mid-cap stocks have had.

The fund strayed away from the norm in 2012 and didn’t add much to holdings in bank stocks, but it already had a high exposure in the sector to begin with. Banks and non-banking financials make up the biggest portfolio share, at 24 per cent.

The fund also didn’t add to the fancied pharmaceutical sector, just retaining holdings there. Uncommon sector picks include entertainment it 2012 and retail in 2011. Its selections have been market outperformers.

The fund has got other sector calls right too. For instance, it built up holding in auto stocks a little into the start of the 2009-10 uptrend. Similarly, it exited underperformer steel early in 2012, which it had significantly picked up the year before. It also gradually pulled out of the power sector over a period of two years by 2011. The fund, however, has a strong focus on oil and refinery stocks, which have been on a muted run for some time now. Similarly, it kept adding to holding in the realty sector.