Mutual Fund Pick - Reliance Large Cap Fund - Analysis

Hey friends,

With the beginning of new financial year 2019-20 from April 1st, 2019, I started my search for some good mutual funds to invest in during the coming financial year.

This time I was searching specifically for large cap fund because of 2 reasons:

1. As per Livemint analysis, Nifty 50 grew 14.93% in FY19.
2. While at the same time, BSE Small Cap and Mid Cap Indices saw a fall in 11.57% and 3.03% respectively.

Hence at this point in time, my safest bet would be on Large Cap Funds.

I studied couple of Large Cap funds and found Reliance Large Cap Fund to be decent and good.

Let me tell my analysis on this fund:

1. It's Crisil rank was found to be 5 Stars. This means, this fund has historically performed well hence can be relied upon.

2. If we see the percentage returns compared to Nifty 50 over last 5 years, we find that it had always outperformed the growth percentage compared to Nifty 50. Additionally, the pattern is almost in sync without much deviation. Since Nifty 50 Index is assumed that it will grow well in future, we can also predict that the fund whose pattern is in sync with Nifty 50 would continue to grow in same pattern.

3. If we check the Year on Year returns percentage, it shows that it had consistently given returns close to around 15% and more which is very rare to find.

 

4. On the same above image, you can also find that Annualized Returns of this fund were always higher year on year compared to its category average return percentage. This means fund managers of this fund are doing good job compared to funds in similar category.

Hence overall this fund turns out to be a reliable fund to invest on if you are looking for Equity funds Investment for a longer period of investment time frame of probably 3-5 years. 

This was my quick analysis over this fund. Do you let me know your thoughts on this.

What is a Mutual Fund

Mutual funds are investment strategies that allow you to put your money together with other investors to buy a collection of shares, bonds or other securities that can be difficult to recreate on your own.

Mutual funds are investment vehicles that pool money from multiple investors to purchase a collection of securities managed by a portfolio manager. Portfolio Manager creates portfolios for investment with a pool of money and often have different types of investment goals.

Shares in a mutual fund are usually purchased at the current Net Asset Value (NAV) of the fund per share. Investors buy shares in the mutual fund, which in turn gives them a claim to the fund's assets (the mutual fund profits). As soon as investors buy in a mutual fund, their money is used by the fund manager to invest in different securities with certain risk and return goals - such as long-term growth or fixed income.

Investors buy shares in the fund and the mutual fund companies get that money to invest on their behalf. One mutual fund may contain hundreds of shares - reducing the risk of loss for investors, if any of the individual funds are poorly managed.
 

Most mutual funds are divided into one of the 6 main categories -

1. Equity Funds
2. Debt Funds
3. Hybrid Funds
4. ELSS Funds
5. Money Market Fund
6. Index Fund

Mutual funds provide investors with the opportunity to purchase professionally managed and diversified securities that can be industry-specific. Mutual funds may charge a fee if investors transfer their shares to another fund within the same fund group. In addition, since you own a portion of the mutual fund, you also pay ongoing expenses to cover the cost of operating the fund, which includes investment advisory fees (payment of the fund manager and research staff), as well as transaction costs associated with the purchase and sale of securities in the fund.