Reliance Mutual Fund equity schemes beat benchmark indices

The core philosophy of a mutual fund is to create wealth for its investors and the CRISIL report shows that Reliance Mutual Fund has done precisely that, said a top official of the fund house.

"The study will enable a retail investor to take an informed decision rather than carried away by some reports on short term performance. The CRISIL report shows that Reliance Mutual Fund equity schemes have outperformed benchmark indices," Sandeep Sikka, president and ceo of Reliance Capital Asset Management, told IANS over phone from Mumbai Tuesday.

As per the CRISIL report, the 10 diversified equity schemes of Reliance Mutual Fund have given higher returns than the CRISIL-AMFI Equity Fund Performance Index.

The CRISIL-AMFI Equity Fund Performance Index is a representative of the equity category.

According to the CRISIL report, the asset weighted composite index of Reliance Mutual Fund, Reliance Equity Composite Index (RECI) formed with the 10 equity schemes have outperformed CRISIL-AMFI Equity Fund Performance Index and also the broad market index, CNX Nifty across various timeframes.

The RECI has been constructed to track and review the aggregate performance of these schemes from inception in Oct 8, 1995 to Sep 30, 2014, states the CRISIL report.

The assets under management (AUM) of the 10 schemes analysed by CRISIL stood at Rs.25,996 crore as on Sep 30, 2014 accounting for 11 percent of industry's open-ended equity AUM.

As per the study, RECI has outperformed the broad market barometer CNX Nifty and CRISIL - AMFI Equity Fund Index over one-, three-, 10- and 15-year period ended Sep 30, 2014.

The outperformance has been higher over long term. Over a 15-year period, an amount of Rs.1 lakh invested in RECI would have yielded Rs.22.80 lakh compared with the CNX Nifty's Rs.5.89 lakh and the equity category's Rs.16.74 lakh, as per the CRISIL report.

RECI has performed well in the majority of the bull-market phases. In the recent market rally, the index outperformed the equity category and the CNX Nifty by 9.50 percent and 22.62 percent, respectively, on an annualized basis.

A systematic investment plan (SIP) on RECI has delivered 20.10 percent over five years, 25.11 percent over 15 years and 24.43 percent 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 percent.

According to Sikka, the company would launch a new overseas fund to attract Japanese investors following the response to its bond fund launched there.