Reliance Growth Fund - How it Delivered 100x Returns in 24 Years?
Reliance Growth Fund - How it Delivered 100x Returns in 24 Years?
Reliance Growth Fund is a top performing mid-cap fund which has the ability to deliver significant returns in the long term. In the recent trends, it has been providing better returns than the peers due to a superior investment strategy which is backed by the market conditions. Investors can gain significant gains from the fund in the future if a disciplined investment is carried out by suitable investors. The fund has a rewarding past and has generated outstanding returns in the past but slightly lost the ratings in the last few years. However, according to the returns of the last few months, Reliance Growth Fund is expected to generate phenomenal gains in the long term if the market continues to support the growth.
Basic Details of Reliance Growth Fund
Reliance Growth Fund is a mid-cap fund and generally invests 70-80% of the corpus in the stocks of mid-cap companies. It was launched in October 1995 to provide long term capital appreciation to the investors through mid-cap stocks. In the initial years, it enjoyed tremendous growth and consistently delivered best returns in the category. Later on, due to changes in the market conditions and portfolio structure of the fund, the performance slightly depreciated and the annual returns after 2009 were lower than most of the peers in the mid-cap category. However, the long term returns are still surprising.
100x Returns in 24 years
Yes. It might sound impossible that any investment avenue can provide 100 times return within 25 years but Reliance Growth Fund has done it. A lump sum investment made at the time of inception of the scheme has grown by 11046.00% which means in actual terms, the investments have been multiplied by 110 times in 24 years. The compounding ability in mutual funds allows investors to gain outstanding returns which generally sound impossible. The consistency to maintain annualised returns of 22% by Reliance Growth Fund is the main reason behind its success. In last 10 years, the gains from this fund (17.18% trailing returns) have lowered down below the category average (21.47% trailing returns) as well as the benchmark (17.98%) due to continuous underperformance of the fund over the decade. Analysing the returns of the fund in the recent trend, we can expect the revival of the fund which can deliver the highest gains in the mid-cap category.
Where Does it Invest?
Reliance Growth Fund has always been a high-risk fund which has invested the majority of the corpus in sensitive and high-risk stocks. In the current portfolio, nearly 75% of the corpus is invested in mid-cap stocks while 12% is allocated in small-cap stocks. Over the last few years, the investments in large-cap stocks have been reduced to include more stocks from the mid-cap section. The fund manager Mr Manish Gunwani and Mr Dhrumil Shah are overweight on financial and healthcare sectors to promote consistent growth and reduce the volatility, respectively. The corpus of the fund is spread across 79 stocks from 14 sectors. In recent months, the fund managers have adopted a blended strategy of growth and value investing by targeting quality stocks at reasonable valuations. This strategy has turned out to be fruitful and Reliance Growth Fund is looking in great shape to deliver high returns in the future.
Conclusion
With the superior investment strategy in the mid-cap category, Reliance Growth Fund has delivered phenomenal gains to the investors in the long term. The power of compounding in mutual funds has aided the fund to provide 110 times return since inception in 1995. It cannot be guaranteed whether Reliance Growth Fund will provide the same result in future but the current investment strategy and portfolio structure are suitable for consistent growth in the long term. Those who are looking to invest must be ready to take the high risk as it is a highly volatile fund and the tenure of investment should be more than 5 years for better returns from the fund.
Summary
Read the article to know how Reliance Growth Fund delivered more than 100x returns in 24 years along with the basic details of the fund.