Markets are showing volatility for a continuation of 6 months now, and because of that most of the equity schemes are underperforming to such an extent that the returns are going in negative. People who used to make high returns on such schemes are now facing a loss of investment because of the underperformance of the major stock market sectors. This is causing a great panic among investors, who are then selling their units at lower prices. Now, if someone tells you that this is the right time to make an investment in the mutual fund market, you will probably think that the person has lost his mind. But that person is 100% right as Warren Buffett once said: “Be fearful when others are greedy and be greedy when others are fearful”. So, the time has come when you have to be a little spontaneous with your investment, and the best option that is available today for investment is Reliance Vision Fund. Let's have a look at what this scheme is and why you should make an investment in this scheme as soon as possible.
This scheme was launched on May Oct 08, 1995, under the equity large and mid-cap category. The objective of the scheme is to generate long-term capital generation by investing in stocks that have good fundamentals and show great possibilities for growth in future. As of now, all of its equity investments are in large-caps (53.35%) and mid-caps (46.65%), and the most favored sectors in equities are finance, automobile, engineering, metals, technology, and energy. Now, let's have a look at some basic details of the scheme.
As on Jul 19, 2018, Reliance Vision Fund NAV is Rs 496.76 and the assets under management as recorded on Jun 30, 2018, are worth Rs 3,076 crore. The scheme charge an expense ratio of 2.18% annually (as on Jun 30, 2018), and you are liable to pay an exit load of 1% if you redeem your investments before completion of 365 days. The scheme is currently being managed by Mr. Ashwani Kumar, who holds B.Sc and MBA degree in finance and have more than 12 years of experience in the capital market. The minimum amount that is required to start an investment in this scheme is Rs 5000 and you can start a SIP for as low as Rs 100.
Why Is it the Right Time?
Reliance Vision Fund has provided returns of -9.03%, 2.70%, and 15.29%, in 1, 3, and 5 years, (as on Jul 18, 2018), respectively. These returns are not that good, but this scheme is still expected to perform well in the future. Why?
Well, the first thing every investor should know that the past performance can't decide the future of a scheme and same is the case with Reliance Vision Fund. The only factors that can affect the future returns of this scheme are its asset allocation and the investment style of its fund manager. As of now, this scheme has major investments in finance, automobile, engineering, and technology sectors, whose stock are trading at very low levels. But, in the coming months, these sectors are going to reach their intrinsic value and at that time the returns provided by this fund will be really high. For ex., as of now, State Bank of India is the top holding of this scheme, now this stock has a current value of Rs 260.55 (as on Jul 20, 2018), but the average value that this scheme used to deal at was around Rs 315. So, when this stock will start recovering to its original value the returns provided by the fund will automatically increase, and same is the case with other stocks that it has an investment in.
So, now you know what Reliance Vision Fund is and why is it one of the best investment options to get high long-term returns. However, the scheme can take a bit more time to provide extreme benefits, so before making an investment do a proper market research.
Go through this article to have a basic knowledge of Reliance Vision Fund.