Reliance Mutual Fund, a part of Reliance Capital, has outperformed the market barometers, created most wealth, and topped on multiple counts to give better returns to its stakeholders, said a Crisil study.
This assessment is part of a first-of-its-kind study done by Crisil that analyzed performance of Reliance Equity Composite Index (RECI) – comprising of ten actively managed diversified equity funds of RMF- across CNX Nifty and Crisil-AMFI Equity Fund Index.
RECI has never given negative return for any five-year period on a daily rolling return basis and generated superior returns in a rising-market scenario. Except the recovery period post sub-prime crisis, RECI outperformed the equity category in the bull phases. It also outperformed the broader CNX Nifty during the bull markets.
Pointing out that “an investment in mutual funds is a long-term game,” he said: “In the milieu, investing at regular intervals over the long term ensures utilising both the high and low points of the market, and making the best of both worlds through rupee cost averaging.”
For example, an investment of Rs. 10,000 in RECI every month since inception till September 30, 2014 – amounting to a principal of Rs. 22.7 lakh – would have grown to Rs. 3.41 crore versus Rs. 99.10 lakh in the CNX Nifty.
“The SIP returns of Reliance Mutual Fund’s schemes clearly highlight the importance of disciplined investing and wealth creation over the long term,” CRISIL Research report said.
Pointing out that nothing quite pays like disciplined investing through SIP over long periods, the report said: “A systematic investment plan (SIP) on RECI has delivered 20.10% over five years, 25.11% over 15 years and 24.43% since inception, though the recent market upswing and extended volatility in the past three years have boosted SIP returns over this period to 33.07%.”
Commenting on the report, Mr. Sundeep Sikka, President and CEO of Reliance Capital Asset Management Company, said: “It is heartening to note that our funds have been performing well despite the market upheavals. CRISIL reinforces our track record and encourages pour fund manages perform even better in the future. It is also a salute to our esteemed investors who had faith and trust in us and stayed with reliance Mutual Funds.”
“We are happy that the report notes that the volatility that measure of dispersion in returns of RECI has been lower than the CNX Nifty. The maximum drawdown or fall since peak to lowest point of the performance index has been better than the equity category but inferior to that of CNX Nifty,” said Mr. Sunil B Singhania, CIO – Equity Investments, Reliance Mutual Fund said.
Over a 15-year period, an amount of Rs.1 lakh invested in RECI would have yielded Rs. 22.80 lakhs compared with the CNX Nifty’s Rs. 5.89 lakh and the equity category’s Rs.16.74 lakh. In percentage terms during the same period, RECI has given an annualised return of 23.16% compared with the CNX Nifty’s 12.21% and the equity category’s 18.88%, the report said.
Mutual funds, which are supposed to be the stepping stone for investors entering the stock markets, assume significance in view of the fact that many retail investors may not have the time for such detailed investments. It is also a better alternative for such investors. Moreover, Investments in mutual funds provide a host of advantages vis-à-vis direct equity investing such as diversification, professional management, choice and convenience.
Reliance Mutual Fund has ten diversified equity funds with assets under management (AUM) of Rs. 25,996 crore on September 30, 2014, accounting for 11% of the industry’s open-ended equity AUM. The list includes two schemes – Reliance Growth Fund and Reliance Vision Fund – which have been in existence since 1995.
The study takes into account the performance of these schemes – Reliance Growth Fund, Reliance Vision Fund, Reliance Equity Opportunities Fund, Reliance Regular Savings Fund, Reliance Regular Savings Fund (Equity), Reliance Tax Saver funds, Reliance Focused Large Cap Fund, eliance Long Tern Equity Fund, Reliance Top 200 Fund, Reliance Quant Plus Fund and Reliance Small Cap Fund – under the RECI index since inception till September 30, 2014