Reliance Small Cap Fund - New Fund Offer
NFO, Reliance Small Cap, New Fund Offer, Sunil Singhania, New Fund, Reliance
NFO, Small Cap, Smallcap, Reliance
The Reliance Small Cap fund has a good fund manager in Mr Singhania, but we do not
believe the current economic environment is suited to small cap investing. So you would
rather give this a miss
The Reliance Small Cap Fund is a new mutual fund that aims to invest 65%-100% of its
money in smaller cap equity. The definition of small cap varies, but it typically refers to
companies not in the top 500 in terms of market capitalisation. Small cap companies, by
their very nature, are more risky than the larger frontline ones. However, as some of
them become the large cap companies in the coming years, they can be multi-baggers
if identified correctly.
Reliance Mutual Fund, and the fund manager Mr. Sunil Singhania, have excellent track
record in managing equity mutual funds. Mr. Singhania also manages the well
performing Reliance Growth Fund, which has a mid-cap focus. Given this, we do not
doubt that this team is one of the best to be able to identify such small cap opportunities
and profit from them.
That said, we do not believe the current economic environment is conducive to investing
in small caps. Small caps are generally hit harder by economic uncertainty. Given the
concerns around a second recession in the West, we do not believe this is a great time
to try your hand at small caps. Moreover, many such small stocks have risen sharply in
recent months, without an underlying growth in outlook.
Thus, we advise giving this fund a miss now. You can watch its performance closely,
however, and aim to invest here when the economic situation improves (say a year
down the line).
Parameter Value Fintotal Comment
Opening Date 26 August 2010
Closing Date 9 September 2010 Nothing ‘closes’ on 9 September!
You can always invest in the fund
later, since it is open ended
Entry Load Nil
Exit Load 2% if
exit within12 months
1% if exit between 12
and 24 months
Fund Manager Mr. Sunil Singhania He has an excellent track record in
fund management and stock picking
Investment 65%-100% in small cap