Reliance Regular Savings Fund-Equity: A good long term buy

Nature: Equity oriented open ended

Inception: June 2005

Assets under Management: Rs 2,829 crore at the end of September 2012

Fund Manager: Omprakash Kuckian

Analysis

• The fund falls under the multi cap category and at the end of September 2010 banks had the highest exposure in the portfolio at 13 per cent followed by software and Pharma. There was a conservative approach followed in terms of the individual holdings as SBI was the top holding with around 4.5 per cent of the portfolio here. ONGC, TCS, ICICI Bank, Hindalco, and Mphasis were some of the other top holdings in the fund.  The portfolio turnover ratio was 0.77 and the beta was 0.9. As compared to the benchmark the BSE 100 the fund was an outperformer over the one, three, and five year time periods.
• Six months later, Banks continued to be at the top of the sector charts with a share of 18 per cent in the portfolio. Software and Pharma were the other sectors where the share was more than 10 per cent. SBI continued to be the top individual holding though the share of the company in the portfolio had become nearly 7 per cent. ICICI Bank, TCS, ONGC, Divis Labs, L&T, and HCL Tech were some of the other top holdings in the fund. The derivatives, cash and other receivables in the fund remained just under 4 per cent. The portfolio turnover ratio in the fund climbed to just below 1 and the fund was an underperformer over the one year but outperformer over the three and five year time periods.
• At the end of September 2011, Banks continued to be at the top of the sector holdings though there was small change below this as Pharma edged up to the second spot passing software. Auto, Construction and Petroleum products had an exposure of below 6 per cent. SBI continued to be the top holding with 5 per cent of the portfolio followed by Divis Labs, TCS, Bharti Airtel, Hero Motocorp, HCL Tech and Reliance Industries. The portfolio turnover ratio remained steady just below 1 and the fund was an underperformer over the one year period but outperformer over the three year one.
• Six months later there was a change in the sector position as Software was now at the top with a 15 per cent exposure followed by Banks and Pharma. Consumer non-durables and Construction had an exposure of around 6 per cent each in the portfolio. The exposure of the top stock was once again in the 4-4.5 per cent range. SBI was the top individual holding followed by Oracle Financial Services, Divis Labs, Infosys, HCL Tech and TCS.  The beta of the fund had moved up to 0.94 and the fund was an outperformer over the three year period.
• The change in the portfolio continued to reflect at the end of September 2012 and it was Pharma with a share of 14 per cent that was on top of the sector holdings. This was followed by Banks, Software, Consumer non-durables and Finance. ICICI Bank was the top holding in the portfolio with a share of over 5 per cent followed by Divis Lab, United Spirits, Oracle Financial Services, Motherson Sumi, L&T and Max India. The portfolio turnover ratio dipped below 0.9 and the fund was a strong outperformer over the one and three year time periods.
• The fund has been a consistent long term outperformer and is suitable for investors who want an exposure across different market capitalisation stocks in their portfolio and have an outlook of more than three years.