Reliance Growth Fund

Reliance Growth Fund: Overview

Reliance Nippon Mutual Funds is a leading fund house in India and is popularly known as Reliance Mutual Fund AMC. The fund house offers a range of equity and debt mutual funds that are capable of resolving the investment requirements of diverse sets of investors. One of the many equity funds that are sponsored by Reliance Mutual Funds is the Reliance Growth Fund. Reliance Growth fund is an open ended equity fund, which mainly invests in company equity and equity-related instruments.

About Equity Mutual Funds

Equity mutual funds get their name from the simple fact that they invest in either company equity i.e. stock market shares or various equity-related instruments that are available to the fund. Due to high exposure to equity, these mutual funds have high growth potential, but also feature a potentially high level of risk, hence risk-averse investors prefer not to invest in them. However, those who are more risk tolerant and are focused on capital appreciation in the medium to long term often prefer equity mutual fund investments.

Investment objective of Reliance Growth Fund

The Reliance Growth Fund investment document mentions a range of objectives as mentioned below:
 

  • The fund focuses on investments that are of high quality including investments made in the shares of various emerging leaders and market leaders.
  • This specific mutual fund attempts to identify various growth stocks, which are valued reasonably. This is in line with the fund’s objective of adopting a GARP (Growth at Reasonable Price) investing methodology.
  • The fund is focused on making investments in key companies that feature high growth potential i.e. companies that are expected to witness a substantial increase in their profitability in the near future.
  • Additionally, the fund manager is expected to focus on identification of deep value stocks that can drive capital appreciation of the Reliance Growth Fund in the future.
  • Lastly, the fund would also consider investments that provide a balance of risk and returns in the long term.   

Investment Strategy Overview of Reliance Growth Fund

The portfolio of investments featured in case of Reliance Growth Fund would feature maximum diversification so as to minimise the risk from high exposure to a particular sector of the economy. Additionally, the fund management team would perform a continuous review of the ongoing relevant economic parameters, market conditions, industries and various sectors to ensure that the best possible investment option is picked among the available ones. When investing in debt instruments such as bonds and debentures, the fund will choose to invest in ones that have been assigned high investment grade ratings by an approved ratings agency such as Fitch, CRISIL, etc.

Fund Information and Statistics

  1. Launch Date: The Reliance Growth Fund was launched on 8th October 1995, and has been delivering consistently high performance since that time.
     
  2. Fund Type: Reliance Growth Fund is an open ended equity fund i.e. any investor can invest in or redeem their investment from the fund at a time of their choice. Moreover, being an equity fund, this mutual fund is focused on equity as well as various equity-related schemes.
     
  3. Minimum Investment: The minimum initial investment for this scheme is Rs. 5,000 and any investments made thereafter will have to be made in multiples of Re. 1.
     
  4. Risk Category: Due to the high exposure to equity and equity-based investment choices (approx. 65% of the portfolio), the Reliance Growth Fund is classified as a moderately high risk investment proposition.
     
  5. Entry/ Exit Load: This open-ended fund has no entry load whatsoever as per current SEBI directives, while an exit load of 1% is applicable in case switch out or redemption of units is completed before a 1 year period is completed from the date of the investment.
     
  6. Tax Considerations: Being an equity mutual fund, the Reliance growth fund is subject to specific short term and long term capital gains taxation rules. As per existing regulations, short term capital gains that occur when profits are made from redemption of the Reliance Growth Fund units before completion of a 1 year period, involved paying a 15% tax on the redemption amount. However, in case of equity funds, there are no long term capital gains involved and the redemption proceeds are completely tax free. 
     
  7. Fund Manager: The Reliance Growth Fund is managed by Sunil Singhania, who has extensive experience of over 20 years in capital markets and currently manages a number of equity funds for Reliance Capital Assets Management Co.

Plans and Options Available with Reliance Growth Fund

  1. Direct Plan: Investors have the option of investing directly with Reliance AMC in order to benefit from the opportunity to invest in the direct plan. This plan has lower management costs associated with it and no brokerage charges, therefore features a higher NAV as well as a greater potential to provide higher returns that others plans of the Reliance Growth Fund.
     
  2. Retail Plan: Individual investors have the option of opting for the retail plan of the Reliance Growth Fund, which can be opted through either Reliance AMC or through a third-party brokerage firm. In some cases, there might be portfolio management charges or brokerage charges associated with retail plan investments, however there are no such charges in case an individual investor invests through Paisabazaar.com.
     
  3. Institutional Plan: This investment plan is suitable for institutional investors to seeking to diversify their portfolio on behalf of their contributors. Institutional plans have a higher initial investment requirement, while the amount required for successive investments is also higher. Institutional plans cannot be subscribed to by individual investors.
     
  4. Dividend Option: An individual has the option to invest in the dividend options of dividend reinvest or dividend payout. In case of dividend reinvest, any dividends declared by Reliance AMC are converted to an equivalent number of units and added to the original amount of units that were bought earlier i.e. the number of units held increases according to the dividend paid out by the fund. In case of the dividend payout option, the dividend declared by the AMC is automatically transferred into the investor’s linked bank account. In each case, the NAV of each unit decreases by an amount equal to the value of the dividend paid out per unit. Both dividend option alternatives are available in case of retail and direct plans of the Reliance Growth Fund.
     
  5. Growth Option: The growth option is preferred by investors who seek capital appreciation over the long term. In this case, any profits made by the fund are invested into the fund to make it grow further. This leads to a proportionate increase in the NAV of each unit and allows the investor to book profits when they redeem or switch the mutual fund units at a later date. However, unless redeemed, the investor does not receive a payout. The growth option is available in case of direct and retails plans of Reliance Growth Fund.

Investment Eligibility in Reliance Growth Fund

Any Indian resident, who has completed 18 years of age, has valid PAN and can complete the required KYC documentation for mutual fund investments as per SEBI guidelines can invest in the Reliance Growth Fund. The fund is considered to be an ideal investment option for individuals seeking capital appreciation over the mid to long term.

Top Holdings of Reliance Growth Fund

In the following section, we have tabulated the leading key equity and equity-related investments of the Reliance Growth Fund*:
 

Investment Sector Top Holdings
Banking/Financial State Bank of India, Muthoot Finance, ICICI Bank, Yes Bank, HDFC Bank, Federal Bank, Indiabulls Housing Limited, Karur Vysya, Canara Bank, M&M Financial, ICICI Pridential etc.
Information Technology/Communications HCL Tech, Infosys, Reliance Communications, etc.
Energy/Oil and Gas Petronet LNG, Reliance Power etc.
Engineering and Capital Goods Greaves Cotton, Texmaco Rail, Larsen, CG Power, BEML, etc.
Chemicals UPL, GSFC, Castrol, etc. 
Cement and Construction Birla Corp., India Cements, Orient Cements, NCC, etc.
Pharmaceuticals Divis Labs, Cipla, Hikal, etc.
Conglomerates Grasim, Orient Paper, Nava Bharat Ventures, etc. 
Metals/Mining Tata Steel, Jindal Saw, Mah Seamless, etc. 
Automotive Mahindra & Mahindra, Ashok Leyland, Tata Motors, etc. 
Manufacturing Max Financial, Welspun India, Bharat Forge,
Money Market Instruments CBLO, IDFC Bank Limited, Kotak Mahindra Prime, HDB  Financial Services Ltd., etc.
Miscellaneous MCX India, JITF Infralogis, Dish TV, SpiceJet, HT Media, etc.

*The list is for illustrative purposes and investments mentioned above are liable to change as per market conditions and fund objectives.

How to Invest in Reliance Growth Fund

An individual investor interested in Reliance Growth Fund can easily purchase units of the fund via the online route through Paisabazaar.com.There are no charges in terms of brokerage or portfolio management charges to make this investment and all an individual investor needs to start investing through the website is to open a free of account on the website, complete the Aadhar-based KYC and start investing in minutes. Alternately, online investments in Reliance Growth Fund can also be made through the Reliance AMC website by opening an account on the website.

In case of offline investments, the procedure may be completed through a third party brokerage however, physical documents such as filled out forms and physical copies of KYC documents and cheques need to be submitted in order to complete the investment. Additionally, brokerage or portfolio management charges may be applicable in case of offline investments made into the Reliance Growth Fund.

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