Reliance Vision is one of the few diversified equity funds with a track record of over 15 years.

For a good part of this period, the fund had a solid record, boosted by its performance in secular bull rallies. Its compounded annual return since its launch in 1995 is 21 per cent.

That said, the last few years after the 2008 slowdown have not been an easy period for the fund. Its five-year return at 3.5 per cent annually, although higher than the benchmark, is marginally lower than the diversified multi-cap fund category average and far lower than top peers.

The fund’s asset under management over the last year fell more than the NAV a unit, signalling redemption pressure. Returns in the last six months, though, suggest improvement in performance. We take a look at what the fund’s sector and stock choices were for the past one year.

Sector trends

With a holding of 17-20 per cent, pharma appears to be the most preferred sector for the fund, suggesting a defensive strategy. The fund marginally expanded its holding in banks and automobile sectors over the year.

These sectors constantly found place in the fund’s top five sector holdings. Software had an 8 per cent weight in its sector allocation a year ago but the fund fully exited this sector in May. Margin pressure seen in large-cap IT companies could be one reason for this.

Stocks in ferrous metals and minerals were also fully exited over the last one year.

The fund also trimmed its holdings in petroleum products from 14 per cent in May last year to 10 per cent in May this year but increased its weight in automobiles from 8 per cent to 13 per cent. From cash holdings of 7 per cent a year ago and 6 per cent even six months ago, the fund’s cash position has come down to only 2 per cent in May by deploying them in equities.

Cement was another sector where the fund increased its holding over April and May.

Stock Moves

Over the past one year the fund held between 27 and 31 stocks. The stock of State Bank of India was the top holding as of May. Exposure to ICICI Bank too was hiked to 7 per cent. Both these stocks delivered well for the fund in the last six months.

Among pharma stocks, the fund increased its exposure to Divi’s Lab over the last one year. The stock has delivered 35 per cent in the last six months. Other pharma stocks in the portfolio were GlaxoSmithKline Pharma and Sanofi India. The fund sold Cadila Healthcare. Infosys, among the top three stocks a year ago, was shown the exit route in May.

The stock has been an underperformer losing 19 per cent over this one-year period. ACC got a place in the portfolio in April and was further added during the year to 4 per cent in May.

The fund gradually ended its exposure to stocks such as Reliance Industries, Tata Steel, Coal India, Axis Bank and TCS in which it had holdings a year back.

New stocks such as Eicher Motors, SKF India, Alstom T&D and TVS motors were brought in.

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