Reliance Growth Fund

Reliance Growth Fund is managed by Sunil Singhania. He has been managing the fund since Jan 2003. Reliance Growth fund has been one of the old horses and was a good performer over years. But in the last few years it has lost its luster.  If you have already invested you can continue to hold it but keep a close watch on its performance. Due to relatively high exposure to mid cap stocks this fund can be part of your non-core portfolio making not more than 30% of your total investment.

Where does Reliance Growth Fund invest your money ?

Reliance Growth Fund is a small & mid cap fund which means your money will be invested in large, mid and small companies. Reliance Growth fund has 35.31% exposure to mid size companies and about 18.33% exposure in small size companies. Small and mid size companies have the potential to become large companies and when that happens you are expected to get bumper returns. Unfortunately it does not happen too frequently.

Suitable for what?
  • Creation of wealth
  • LifeStyle Needs
Not Suitable for?
  • Child's Education
  • Child's Marriage
  • Planning for Retirement
  • Buying a house 
How much to invest?

Minimum one time investment is Rs 5,000 and minimum SIP is Rs 100. Do not make Reliance Growth Fund as part of your core portfolio. Core portfolio includes investments that are made for your basic goals and makes up about 70% of your investment portfolio. Reliance Growth Fund can be part of your satellite portfolio. Do not make the mistake of investing in too many mutual fund schemes. At any point of time do not have more than two mutual fund schemes in your core portfolio.

Our recommendation for fresh investment
Not Recommended
Our recommendation for existing investment
Recommended
How has Reliance Growth Fund performed in the past?

If you had invested Rs 1 lakh when the fund was launched at Oct 1995, your value of investments would be around Rs 46.5 lakhs. If you had invested Rs 1 lakh five years back it would have become Rs 1.2 lakhs. The performance has not been better or similar to other diversified cap mutual funds. The fund has been giving at around 4% every year for those who stayed invested for last 5 years.

Assume you had invested Rs 10,000 every month in Reliance Growth Fund through SIP for the past 5 years today you would have around Rs 7.4 lakhs.

How will Reliance Growth Fund perform in the future?

Needless to say no one can predict the future of markets. We have firm belief in the future prospects of the Indian economy. If the Indian economy grows at 9% then the leading companies tend to do well. When the companies do well their stock prices follows their performance. So if you expect the economy to grow at 8% then you can expect top performing mutual funds to give you returns in excess of 14%.

Mutual fund schemes that have exposure to mid size companies tend to show results when their bet on few companies comes true. We advise you to avoid too much of star gazing and future prediction. Be reminded that equities are one of the asset classes that have the potential to beat inflation. Your aim for core portfolio should be to beat inflation.

When to review the performance?

Once you invest in the fund do not get into the habit of checking the NAV daily or monthly. Review the performance once a year. Too much attention is not good.

What charges apply?

A onetime fee of Rs 100 is charged on investments over Rs 10, 000 made through distributors. If you are a first time investor in mutual funds an additional Rs 50 is charged to cover KYC expenses. This is deducted from your investment and can be skipped if you buy directly from the mutual fund via their website or offices.

If units are sold within a year an exit load of 1% is deducted from your total returns. No exit load applies for units withdrawn post one year. Expense ratio of Reliance Growth Fund is 2.25%. This is charged to recover the fund management company’s expenses on securities’ transactions, commissions, registrar fees, etc. Your mutual fund returns will be total returns less expense ratio.

When to exit?

Withdraw when your goals are closer to achievement. Do not remove the money during when the markets go up or down. Do not panic. Stick to your goals.

What are the tax implications?

The returns in a mutual fund are absolutely tax free, provided you do not withdraw within 1 year. Reliance Growth Fund does not qualify for sec 80C ELSS benefits.

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