If a someone had invested Rs. 4 lakh in 2003 in Reliance Banking Fund, his corpus would have turned over Rs. 1 crore in less than 15 years, means investor’s wealth has doubled in every 2.8 years in this fund.
Reliance Banking Fund is a sector fund focused on the banking and financial services sector. This is an open-ended equity fund having no entry and exit barriers. The fund aims to generate a superior return through active fund management.
The fund has outperformed its benchmark, Nifty500 Banks Index, by almost 450 basis points since its inception.
Reliance Banking Fund, which had an asset under management of Rs. 3034 crore as of July 31, 2017, is one of the flagship funds of Reliance Mutual Fund. Started on May 26, 2003, the Reliance Banking Fund’s net asset value (NAV) has grown from Rs. 10 to Rs. 265.42 on August 7, 2017, delivering a compound annual growth rate (CAGR) of 25.52 percent over 14 years.
It means investor’s wealth has doubled in every 2.8 years. For example, if an investor had invested Rs. 4 lakh in 2003, his corpus would have turned over Rs. 1 crore in less than 15 years.
About Fund Manager
- Reliance Banking fund is a focused banking and financial services sector oriented fund investing across market caps within the sector.
- The fund is well diversified across sub-segments like Private Banks, PSUs, NBFCs, Housing Fin Co’s, Broking houses, etc.
- The fund endeavors to generate superior alpha through active fund management.
- The alpha generation is attempted through tactical allocation across various sub-segments and differentiated investment ideas.
- The fund thus attempts to lower risk through diversification while retaining the alpha creation potential.
Banking and financial services sector have been one of the best performing sectors in India. Continued reforms by the government and increasing financial inclusion have benefited this sector over the years. More and more people in India are now moving from the informal lending to formal lending, which has helped the banking sector in increasing its penetration.
With returns from gold and real estate falling, more and more domestic savings is now channelized to financial savings, which has benefited the banking and financial services industry.
Retail investors can invest in the fund through SIP (Systematic Investment Plan) route, which is considered a good medium to create long-term wealth.
A monthly SIP of Rs.10000/- in this fund on May 28, 2003, then your total investment of Rs. 17.10 lakh by July 28, 2017, would have grown to Rs. 95.37 lakh, a staggering 22 percent CAGR.
Risks: Sector funds fall in the high risk, high return category of funds. If the particular sector does well, the sector funds deliver strong returns but if the sectors performs poorly than the returns could be below that of the broader markets. These funds are considered riskier than regular diversified funds.
Mutual Fund investments are subject to market risk. Please read the offer document carefully before investing.
Please check the Scheme Information Document
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