5 Year Close Ended Equity Fund From Reliance Mutual Fund- Review
Reliance Close Ended Equity Fund Series A is a five year close ended equity fund from Reliance Mutual fund. This Series A fund is open for Sale during NFO (New Fund Offer) Period.
NFO of Reliance Close Ended Equity Fund Series A Opens on 15 Nov 2013.
NFO of Reliance Close Ended Equity Fund Series A closes on 29 Nov 2013.
To whom Reliance Close Ended Equity Fund is suitable?
This fund is suitable for investors with long term investment horizon (5 years) who are seeking Long Term Capital Growth.
Where does the fund invest its funds?
The fund seeks to invest in equity and equity related products with a diversified portfolio across sectors and market capitalizations. There may be small exposure in debt related instruments too.
What is the risk rating of the fund?
The risk rating is HIGH. As per colour code to describe risk in mutual funds the colour coding for this fund is assigned as BROWN (Click Here to read my article about detailed information regarding colour coding to represent risk in mutual funds).
How the Reliance Close Ended Equity Fund will select companies to invest?
Fund would endeavor to invest into Companies having:
Solid businesses available at low “absolute valuations”.
Sustainable business characteristics with 10-20 year operational track record which are at an inflexion point to scale up.
Currently high ROE or rising ROE’s.
Ability to generate sustainable free cash flows.
High operating leverage not getting captured in today’s valuations.
The fund would endeavor to create a well diversified, Flexi Cap portfolio.
Fund would endeavor to declare dividend as and when opportunity arises.
What is the investment philosophy of Reliance Close Ended Equity Fund?
1) Invest in companies with Long Term Growth Prospects undermined due to near term challenges like Insurance, Media, Hospital etc.,
2) Companies impacted due to reasons which are not fundamental to the company like Mandatory offer for sale, Disinvestment by Government etc.,
3) Top 2-3 companies which are leaders in their respective segments, Companies with 15-20 years of listed history, companies with low near term expectations and companies which are not covered (Researched) and focussed by many participants.
4) Companies in which promoters are increasing their stakes or going for buy-back of shares or Companies with possibility of M&A (Merger & Acquisition) activity.
Will the Reliance Close Ended Equity Fund get listed on stock exchange?
Being a closed ended fund, it has to be listed on stock exchange. This fund will get listed on BSE (Bombay Stock Exchange).
What are the investment options available to invest in the fund?
For investors going through Direct Option – Growth & Dividend Payout.
Other than Direct Option mode – Growth & Dividend payout.
What is the minimum amount that should be invested?
Rupees 5000 and after that in multiples of 1 rupee each.
What are the entry / exit loads / charges in Reliance Close Ended Equity Fund?
Entry Load – Not Applicable.
Exit Load – Not Applicable Since the scheme shall be listed on BSE Exit load shall not be applicable.
How the performance of Reliance Close Ended Equity Fund be measured?
The performance of the fund is measured against it’s benchmark (S&P BSE 200 Index ).
Who is the fund manager?
Sailesh Raj Bhan.
Reliance Close Ended Equity Fund – Series A
The Fund will make an effort on owning stocks as businesses and valuing them for their “absolute return” potential.
Focus will be on quality companies with long track record currently beaten down due to lack of participation, lack of research, low near-term expectation & other non- fundamental reasons.
Strategy of the fund will be not to completely mirror the benchmark.
Fund will endeavor to invest across market caps and will be well diversified as many sectors/stocks trading below fair value.
Source: Reliance Mutual