Aug 06, 2018 5 min read

Reliance Small Cap Fund Review 2018 - Risk & Performance Analysis

Read to know all about Reliance Small Cap Fund Growth.
Undoubtedly, Reliance Small Cap Fund is one of the most attractive funds in its category which is known for its sky-high returns, thus making it a sought-after option in equity category as well. But, due to its highly aggressive nature, the risk that it contains is also quite high.

Therefore, today in this blog, we are going to discuss this scheme and the crucial points that one must consider before investing in this fund from Reliance Mutual Fund. The review methodology is based on the study of basic details of Reliance Small Cap Fund Growth, its past performance where the risk and returns are tested, and finally the portfolio analysis.

So without any further delay, let’s begin!

Fund Overview

Reliance Small Cap Fund was launched on 16 September 2010, and since then it has delivered quite exceptional returns to its investors. The inclination of the investors towards this scheme has led it to gain huge popularity, thus making its AUM a huge amount worth Rs 6,944 crore till May 31, 2018. The fund lies in the safe hands of two of the most versatile fund managers of the industry, Mr. Dhrumil Shah, and Mr. Samir Rachh. The key point to notice is the expense ratio of the fund which is 1.99%, way too less than the other schemes that lie in the similar category. The minimum amount one needs to invest via SIP is Rs. 100, however, the lumpsum investment is closed in this scheme due to its high AUM. Along with this, the limit for SIP investment is also set which is Rs. 1,00,000 per person. Besides, being a new fund, it hasn’t experienced much negative phase throughout its life.

What the Past Performance of Reliance Small Cap Fund Depicts?

Return Analysis of the Scheme

Firstly, we will perform a return check of the scheme where we’ll see the trailing and rolling returns. The trailing returns help one to examine the current trend of the fund, whereas the rolling returns show the returns at different time intervals. To analyze, we have considered rolling returns every three years with a gap of 6 months each. In the case of trailing returns, average returns since launch as well as three and five years returns are analyzed as on June 21, 2018. Check the table below for the details:

returns analysis

It’s clear from the table above that the fund’s three and five-year trailing returns are way too higher than the category. Even in the case of rolling returns, the fund has consistently beaten its category’s average returns by an excellent considerable margin. This makes it the best fund considering the category and even the equity space as a whole.

“If you would have invested Rs 5000 in this scheme five years ago, you could have earned a value of Rs 5,63,585 with an investment amount of Rs 3,00,000.”

Risk Analysis of the Scheme

The three important parameters that are studied to analyze this part include:

  • Volatility- Standard deviation and Beta
  • Maximum Drawdown of the fund
  • Upside and Downside ratio
  • Finally, the Risk to Reward Ratio

risk analysis reliance small cap funds

Considering all the above factors in the table, it can be seen that the risk is quite high in this fund which is even higher than the category’s average. To get an in-depth analysis of these factors, click on our trending YouTube video link on Reliance Small Cap Fund.

What Does the Portfolio Allocation Tell About the Fund?

portfolio of reliance small cap fund

 information of reliance small cap fund

top % sectors

  1. The fund has aggressive asset management which is focused on investing in high-growth stocks. This investment strategy helped the scheme to beat its benchmark and category by a considerably good margin.
  2. According to market cap, the fund has an adequately balanced allocation where it has invested 62.36% in small-cap companies, along with 30.51% in mid caps and the rest in large and giant companies to ensure stability.
  3. The top sectors include engineering, chemical, consumables, financial, and construction whose expected growth in the future is good as per the experts.
  4. Considering the valuations of the fund, it is an attractive pick where in the present phase, Small and Mid-cap stocks are quite expensive.
  5. The P/E ratio as well as P/BV ratio of the scheme is lesser than the other funds of the category; thus this makes the risk factor a little lower than other schemes of the category.

Should You Invest in Reliance Small Cap Fund (G)?

Well, it’s indeed one of the most recommended funds in the category. Although the fund has an aggressive investment style, it has delivered good and consistent returns throughout. Such attributes make this an ideal choice for those investors who wish to make high profits in the long-term and have a good risk-tolerance capacity. Henceforth, investors investing in this scheme should have an investment horizon of at least seven years.

We hope you’re now clear about this quality fund from the basket of Reliance MF. If you have any other query about it, connect with us via call or email. We will be happy to help!

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