Reliance Growth Fund Underperforms Market
April 2, 2011
The Markets have firmly closed above the 200 DMA and we wanted to update you on the performance of the Funds that we have recommended here. Reliance Growth fund controlled by Reliance ADAG has underperformed by a whopping 9% and the reasons could be that the funds exposure to its own group company stocks which are on the LOSING edge.
Data suggests that on 19/11/2010, SENSEX closed at 19585 while Reliance Growth Fund NAV was 506.41. SENSEX made a low of 17463 on 10/2/2011 and the Fund NAV dropped to 421.63 – a drop of 16.74% compared to the drop in SENSEX by 10.83%. On its path of recovery, SENSEX has now climbed to 19420 [01/04/2011] while the NAV of this Fund is languishing at mere Rs 459, thus under performing itself by a whopping 9.28% [ Compares NAVs when SENSEX @ 19585 – 19/11/2010 and 19420 – 01/04/2011]
Now What do we do with Reliance Growth Fund – Your Investment is 100% safe as of now. However, with the Chairman Reliance Anil Dhirubhai Ambani involved in too many controversies [2G Scam, Rigging of Unitech Stock – Courtesy Nira Radia Tapes, Buying Journalists & Media, Non-Movement of investigation files in the O/O SEBI, etc] we advise investors to look for a decent exit when the market rises as Reliance ADAG fund managers have exposed themselves to ADAG group company stocks. Anil Ambani companies have massively underperformed and we firmly believe that Anil is accountable for the same and should be fired and independent professionals brought to manage the companies.
Performance of HDFC Funds During the Recent Fall & Rise: We have also recommended funds from the HDFC Mutual Funds and here is their performance score card.
HDFC Top 200 Fund: Sensex @ 19585 on 19/11/2010 NAV = Rs 223. Current NAV 215 – Under perform by 3.5%
HDFC Equity FundSensex @ 19585 on 19/11/2010 NAV = 299. Current NAV 282.66 – Under perform by 5.4%
HDFC Tax Saver FundSensex @ 19585 on 19/11/2010 NAV =246 Current NAV 232.77 Under perform by 5.3%
HDFC Funds have underperformed but by lesser percentage when compared to
their its own benchmarks. However, we strongly advise investors to stay invested in HDFC Funds as they have a very strong professional management backed by the best research in industry and is the only group / company from India to be in the World’s Most ethical companies.