Strike the Balance between Risk and Return with Reliance Equity Savings Fund

Ever thought of investing in mutual funds but backed off due to the fear of high risks? Did you ever think that making mutual fund investments is not your cup of tea? Do you feel miserable looking at your friends making loads of money, while you still sit in your office chair looking at the clock to strike 5.00 p.m.? Then you have arrived on the right page, as this article contains the solution to your financial well-being. Here, we’d be discussing about one of the best equity savings options – Reliance Equity Savings Fund – and how it can help you to grow richer and wealthier in your lifetime.

So, buckle up, folks! We’re going on a knowledge ride!

Discussing the Basics

Reliance Equity Savings Fund, as the name suggests, is an equity-oriented mutual fund of the hybrid origin. Here, investments are done in a much more sophisticated manner, as the fund simply doesn’t chose the best equity instruments for its portfolio. Instead, it scans the market to find equity instruments that belong to thriving industries, and are priced fairly in regards to the market scenario. Note that the fund is not an “equity fund”, but an “equity savings fund”. Here, a far more sophisticated method of investments adopted by the fund managers to ensure that there is a stark build-up of wealth in the long run, besides appreciation of capital and arbitrage profits. Let’s now discuss what equity savings funds are.

Equity Savings Fund – A Brief Intro

Equity Savings Fund follow a modified route of investment. Instead of just pinning the investors’ capital in random equity instruments, they diverge the capital into equity, debt and money market instruments, almost like what a top-performing balanced fund does. This ensures that there is a proper balance between risk and returns, and that the portfolio sustains sufficient energy to perform. Also, there is a use of derivative options which is mainly targeted towards risk control. Although the intensity may vary according to the market forces, but this approach reduces the risk by a whopping 15-20%. Hence, equity savings fund provide the privilege of a high-end equity investment together with the protection from high risks blows.

The Portfolio Built of Reliance Equity Savings Fund

Taking into account the benefit of following the equity savings investment approach, the fund managers at Reliance Equity Savings Fund (G) have created a diverse portfolio that ensures steady performance of the fund. The portfolio space is distributed (almost) evenly among equity, debt, and cash equivalents, where debt have an occupancy of nearly 30%, equity of 48%, and cash equivalents of about 26%. There are a total of 48 equity stocks belonging to different industry sectors, besides 10 bonds and other debt instruments like commercial papers and debentures. Further, it has been ensured that the debt instruments chosen for the portfolio are of high credit-rating such as AAA and AA instruments, and shall not include any poorly rated instruments that could otherwise hurt the overall performance of the portfolio.

The Sector Allocation

In order to infest the portfolio with proper dose of diversification, the fund managers have invested in the top-performing sectors of the economy. Mainly, the assets are invested in Financial & Banking sector, Construction sector, and the Energy sector that together possess almost 27% of the assets of the fund. This is followed by other top performing sectors of the economy such as Automobile sector, Technology sector, and Communication sector and several others, where the remaining assets of the fund are parked.

The Past Performance

Reliance Equity Savings Fund – Regular Plan (G) is a new addition to the market, started just four years ago in May, 2015. Hence, there isn’t much data available to judge the performance of the fund. However, there is some information regarding the past 3-year performance which tell-tales that the fund scored an average of 6.62% returns, which is a good figure for a starter.

Hence, if you’re planning for a long-term investment and want a good option in your portfolio, then you must go with Reliance Equity Savings Fund.