Reliance Small Cap Fund: Fund Review

Reliance Small Cap Fund has been amongst the top performers in the small-cap fund category. Reliance Small Cap Fund has an asset size of Rs 7,461 crore as on 31st January 2019, co-managed by Mr. Samir Rachh and Mr. Dhrumil Shah. From Rs 1,282 crore in December 2014, assets under management have touched Rs 6,613 crore in February 2018.

 

 

Fund placed a limit on subscription of units

Reliance Small Cap Fund is not accepting lumpsum investments starting from March 26th, 2018. Investors can, however, register systematic investment plans (SIP) or systematic transfer plan (STP) up to Rs 1 lakh. The fund house mentioned on its website that “the limit on subscriptions of units has been done with a view that increasing the size of the corpus of the scheme may prove detrimental to existing unitholders of the scheme”.

Performance

Reliance Small Cap Fund has been amongst the top performers in the small-cap fund category giving annualized returns of -18.8% for 1 year, 13.8% for 3 years and 26.49% for 5-year periods, respectively. The S&P BSE Small Cap Index has returned -25%, 8.36%, and 18.59% in the same periods, respectively.

This fund has beaten its benchmark in all seven years since its inception and has held onto a three or four-star rating without a pause. Reliance Small Cap Fund has outperformed its benchmark by 6-7 percentage points. It outdid its category by 4-5 percentage points. Among its peers, the fund has given the highest 5-year annualized return, indicating that the fund has performed consistently better in the long term.

Fund1 Year Return (%)3 Year Return (%)5 Year Return (%)
Reliance Small Cap Fund(G)-20.16%13.8%26.49%
HDFC Small Cap Fund-Reg(G) -9.14%18.11%20.37%
SBI Small Cap Fund (G)-21.81%15.06%28.86%
Franklin India Smaller Cos Fund(G)-17.42%10.54%22.35%
L&T Emerging Business Fund (G)-16.41%17.14%-%

Fund Information

Reliance Small Cap Fund high-risk fund is a star in the category.Reliance Small Cap Fund adheres to a philosophy of finding good businesses at a good price without leaning overtly towards either the value or growth styles of investing. This approach has helped it outperform both its benchmark and category over one year, three years, five years and also in the since launch period. The margin of outperformance has remained high in the last year as well. Reliance Small Cap Fund seeks to generate long-term capital appreciation by investing predominantly in equity and equity related instruments of small cap companies and the secondary objective is to generate consistent returns by investing in debt and money market securities.

The fund invests 65-75% in small cap. The top five holding sectors constitute 60.27% of the portfolio. These include engineering (14.6%), chemicals (14%), financial (12.1%), FMCG (10.53%), and construction (9.04%).

Recommendation

It is recommended to invest in Reliance Small Cap Fund through SIP. The upper limit is Rs 1 lakh and the fund has closed subscriptions for lump sum investment. Reliance Small Cap Fund is ideal for long-term goals like retirement, kids’ education, a seed fund for own startup. Don’t look at returns of these funds in the short-term.

Smart Tip: This fund has higher ups and downs (volatility) than other equity funds but can yield much better returns. Invest in this fund for an investment horizon of at least 5-7 years to give the best results.

Fund NameReliance Small Cap Fund
Launch DateSeptember 16th, 2010
AUMRs 7,270 Cr
Return (Returns greater than 1 year are annualized)Since Launch: 17.07%
1 Year: -20.16%
3 Year: 13.8%
5 year: 26.49%
Expense Ratio2.49%
Fund Category RiskHigh
Investment PlanGrowth
Minimum Investment Horizon5+ years
Minimum InvestmentRs 5,000
Minimum Additional InvestmentRs 1,000
Exit Load1% if withdrawn within 1 year
Fund ManagerSamir Rachh
Dhrumil Shah
Kinjal Desai

Ride the market like a Pro, Invest in Upwardly Small and Mid Cap Portfolio investment plan. Happy Investing!

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1 comment
  1. Good interesting content …
    I added your website into my bookmarks.
    🙂 Looking forward for new updates!

    Best regards,
    Matthew

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