Reliance Regular Savings Balanced Fund is a hybrid equity-oriented fund. It seeks the best of both worlds by investing around 65 to 75 per cent in equity and equity-related instruments and the rest in debt and money market instruments.
The fund’s equity portfolio is well managed and diversified, with high quality Large-Cap stocks and Mid-Cap stocks with attractive valuations and long-term growth potential. The investment style hinges on sector diversification, rather than taking aggressive bets on specific stocks. The fund focusses on reducing the volatility of returns by increasing/decreasing equity exposure based on market outlook. The debt portfolio comprises high-quality debt instruments, with a maturity profile ranging between one to seven years, keeping the interest rate outlook in mind.
In terms of performance, the fund has been a consistent performer over the long term. It has generated a CAGR of 12.16 per cent. In the last four calendar years, from 2007 to 2010, the fund has been in the top quartile, and has significantly outperformed its category average.
The fund has invested around 71 per cent in equities, 24 per cent in non-convertible debentures (NCDs) and the balance five per cent in cash and money market instruments. On the equity side, the top five sectors comprise 40 per cent and the top 10 stocks account for 32 per cent of its portfolio. On the debt side, the fund has a modified duration of about 167 days with a running yield of 9.30 per cent.
Currently, equities are trading at attractive valuations, and the yield on debt markets are also at attractive levels. The fund provides the benefits of investing in both asset classes. Investors with a moderate risk profile can look at investing in this fund with a three-year time horizon.
| Trailing returns (%) as on 11/11/2011 |
| Time Frames | Fund | Category |
| Year-to-Date | -12.38 | -8.40 |
| 1-Year | -16.29 | -10.78 |
| 3-Year | 25.21 | 19.13 |
| 5-Year | 12.75 | 7.00 |
| Returns up to 1 year are absolute and over 1 year are annualized |
| Top Five Holdings (% of Net Asset as on 31/10/11) |
| Reliance Capital (NCD) | 5.20% |
| HDFC Bank | 4.14% |
| Infosys Technologies | 4.05% |
| Divi's Laboratories | 3.89% |
| Citifinancial Consumer Finance (NCD) | 3.49% |
| Total of Ten Holdings 31.40% |