Fund of Fortnight

Reason for recommendation

Reliance Multi Cap Fund - Direct Plan (Growth)




The Indian equity market is trading at its lifetime high thanks to the return of NDA government at the centre with a strong majority. Reforms are expected in various sectors, which is fuelling the optimism among investors. Nonetheless, investors should also understand that in valuation terms, markets are not cheap. Therefore, in the next few quarters, you are not sure which sectors or capitalisation is expected to perform better. Hence, in such a situation, it is better to park your funds in multi-cap funds and let the fund managers do that for you. These funds have the flexibility of investing across the market caps without any limitation. Therefore, the fund manager may assess the situation and invest accordingly. Reliance Multi cap is one such fund that is a multi-cap in a true sense as most of the other multi-cap funds have invested majorly in large-cap stocks. The category average investment in large-cap is almost 68 per cent, while Reliance Multi cap fund has 53 per cent of its corpus in large-cap stocks while 27 per cent is in mid-cap and the remaining 20 per cent is in small-cap. Besides, the fund is well-positioned in terms of sector allocation to tap the next move of the market. In terms of category, the fund is overweight on consumer cyclical and Industrials.



Experts believe that industrials and consumer cyclical are the sectors that are going to perform well, going ahead, in the next 12-18 months. These are sectors where economists are expecting an improved demand outlook. Therefore, an investor with moderate risk and investment horizon of one year can invest in the fund.