Religare Banking Fund

Religare Banking Fund is being managed by Amit Ganatra. He has 7 years experience in this domain and took over in November 2010. Its performance compared to its peers has been average. In general Banking & Financial Services is an ‘in’ sector. If you have invested in this fund, keep a close watch on where performance is headed. If you are a new investor you might want to go in for a better fund in this sector. Investing in sectoral funds is highly risky.

Where does Religare Banking Fund invest your money?

Religare Banking Fund is a banking & financial services sector fund which invests your money in stocks of banks and NBFCs. It is biased to large cap stocks. The fund has 67% exposure to large cap banks, 32.87% exposure to mid cap banks and 0.15% exposure to small cap banks.

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 SIP is Rs 500 per month. Do not make Religare Banking Fund as part of your core portfolio. Core portfolio is investments that are made for your basic goals and makes up about 70% of your investment portfolio. Religare Banking Fund can be part of your satellite portfolio. Do not do 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
Recommended
Our recommendation for existing investment
Recommended
How has Religare Banking Fund performed in the past?

If you had invested Rs 1 lakh when the fund was launched in July 2008 the value of your investments would be around Rs 2.03 lakhs. The performance has been better than other mutual funds in this category. The fund has been giving at around 18% every year for those who stayed invested since inception.

Assume you had invested Rs 10,000 every month in Religare Banking Fund through SIP from the month of its inception today you would have a decent Rs 8.36 lakhs.

How will Religare Banking 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 9% then you can expect top performing mutual funds to give you returns in excess of 15%. 

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 Religare Banking Fund is 2.50%. 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 enter?

Now! There is no good time to invest rather than now. Do not try to time the market and especially so if it is an SIP. Do not follow news channel and other experts to know the right time to invest. In the long run it does not matter. Mutual fund is unlike a stock where you are looking at the right price. This job will be done by the mutual fund scheme manager. If you have planned your investments and decided on the amount you want to invest do not think further, just go ahead.

When to exit?

Withdraw when your goals are closer to achievement. Do not remove the money 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 did not withdraw within 1 year. Religare Banking Fund does not qualify for sec 80C ELSS benefits.

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