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As the demonetization took place, the banking sector has got a new life. The new currencies in the market and high growth rates of the bank have helped the banking sector a lot in getting in a better position. And, so does the Reliance Banking Fund which is offering higher returns than its index and peers in the long run. The financial experts of MySIPonline have researched on the fund, which has been discussed below:
Reliance Banking Fund:
The fund aims at generating consistent returns by investing in equity and equity-related securities of the companies which are in the banking sector or the ones who are engaged in the similar activities.
The average market capitalization of the fund is Rs 66,036.04 Cr, which has been invested in the stocks of 27 banking companies. This capital is invested 53.09% in giant companies, 6.27% in large-cap companies, 32.56% in mid-cap, and 8.08% in small-cap companies.
The top five companies where the fund is investing in are HDFC Bank, ICICI Bank, State Bank of India, Bharat Financial Institution, and Axis Bank.
Past Performance Analysis and Risk Measures:
Reliance Banking Fund growth plan was launched in the year 2003, and has provided the returns of 24.57% since inception. Its AUM is Rs 2,851 Cr as on Jun 30, 2018, with an expense ratio of 2.04% as on May 31, 2018.
As per the financial experts of MySIPonline, the fund has been performing consistently well, beating its benchmark, Nifty Bank (TRI). The highest returns of the fund were in the year 2009 which were 82.29%. The annualized returns of the fund in the year 2014 were 64.88%, -6.02% in 2015, 11.5% in 2016, and 44.13% in 2017.
The alpha generated by the fund in the past three years is 0.65% as on June 30, 2018. The trailing returns of the fund in the past three, five and seven years were 13.62%, 20.30%, and 14.42%, respectively. The fund has beaten its benchmark and peers.
Fund Manager:
Mr Vinay Sharma has managed the fund since April 2018. He chooses companies across various segments like private banks, PSUs, NBFCs, housing & finance companies, etc. This diversification in the sector helps the fund to generate alpha across the segments irrespective of having fewer options.
He has an overall experience of 14 years. He has competed his graduation in architecture from MNIT, Jaipur and PG Diploma in Computers from IIM Calcutta. He is also a Charter holder from CFA Institute, USA.
Investors’ Suitability:
Reliance Banking Fund G is suitable for investors who have the appetite of tolerating high risk and have the investment horizon of more than 3 years. It has been a good fund for the investors who have inside-out details of the banking sector, as it takes bet in the companies engaged in the banking sector or allied activities.
The NAV of Reliance Banking Fund G is Rs 266.6082 as on July 11, 2018. The initial minimum amount of investment in the fund is Rs 5,000. The minimum amount of SIP is Rs 100 on a monthly basis. For more information regarding fund and investment, connect with our experts at MySIPonline.