The simple answer to why Reliance Small Cap Fund has given such an awesome performance (87% YOY, 57% 6M & 44% 3M) is because Sunil Singhania’s selection of stocks has been stellar.
When you see his choice of stocks, you will see why he is so highly regarded amongst investing circles. Most of the stocks in the portfolio have given multi-bagger returns. Ceat, which has a 4.84% allocation, leads with an awesome 331% gain. TVS Motor has made a hefty contribution with a 263% gain. The other notable contributors to the wealth of the fund are Atul Ltd (159%), HSIL (138%) & Persistent (102%).
Interestingly, Sunil Singhania has been underweight Pharma (8.50%) and Banks (6.04%). Instead, he has been overweight on cyclical stocks with Chemicals (12.66%), Engineering & Capital Goods (10.47%), Cement & Construction (9.86%) making the bulk of the portfolio. Nearly, 10.83% of the portfolio is in Infotech stocks but here again, the selection of stocks like NIIT (183% gain), Persistent (102%) and Cyient (88%) have ensured stellar returns.
Interestingly, some of the stocks in Sunil Singhania’s portfolio are still hot favourites (e.g. Federal Bank and HSIL). So, we still have a chance to make amends.
| Top 10 holdings of Reliance Small Cap Fund | |
| Equity | Sector |
| Atul | Chemicals |
| Ceat | Automotive |
| Persistent | Technology |
| Styrolution ABS | Chemicals |
| LG Balakrishnan | Engineering |
| TVS Motor | Automotive |
| Federal Bank | Banking/Finance |
| Cyient | Technology |
| HSIL | Cement |
| Unichem Labs | Pharmaceuticals |
It was an ordinary performer till Sept 2013. Let us say, if you had commenced an SIP in 2010 (decent enough time for this kind of fund to show some mettle) – say from 1st Oct 2010 (its inception), then after 36 months, the value invested – say 1000/month would have been 32K, against an investment of 36K. In fact, from inception till Sept, it would have been the same story. Many would have got chickened out and left the fund, long after the unusually LONGISH lock in of 2 years. The ROR was not even positive through this time and the pathetic story continued for 4 long years. Then, this sudden surge happened. I am not sure how many had really stayed back to reap the rewards!!
http://www.valueresearchonline.com/funds/newsnapshot.asp?schemecode=11463&utm_source=direct-click&utm_medium=funds&utm_term=reliance+sm&utm_content=Reliance+Small+Cap&utm_campaign=search
Brilliant observation Specialist. Right now the small caps and stocks in the Z category even have started moving upwards.