Should You Invest in Reliance Banking Fund?

This is exactly the question that might have popped up in your mind whenever you must have read or thought about investing in a mutual fund scheme which further invests in the banking sector. Isn’t it? Well, the way things have turned out to be in the recent past in banking sector, anyone would be hesitant to invest in such schemes. It is a human nature to be careful of things, once they have seen it blow. Banking sector plays a very important part in the Indian economy by playing a role of the credit creator and providing opportunities to common people to save, invest, and perform various monetary transactions. Can one blow really turn the banking sector around to such extent that it cannot make a comeback? Not really! Banking sector will definitely find a way back and has been making efforts to stop such blows. So, Should You Invest in Reliance Banking Fund? Yes, you definitely should. This scheme was launched by Reliance Mutual Fund on May 26th, 2003 with an investment objective to earn capital appreciation through investment in equity and equity-related instruments of Banking companies and the other companies related to it. Reliance Banking Fund is an open-ended scheme, and thus it provides its investors an opportunity to buy and sell the units directly from the fund house itself. There is no entry load that an investor has to bear nor an exit load that is to paid which means that he/she is free to from any kind of additional baggage. This scheme is great for aggressive investors as the risk involved in this scheme is high. The investment philosophy of Reliance Banking Fund is to remain focused on investing across market caps within the Banking Sector. It is well diversified across sectors like public sector, private sector, non-banking finance companies, etc. It attempts to generate superior alpha by following the active method of fund management, and thus tries to lower the overall risk involved. The top ten companies in whose stocks, it has invested majorly are HDFC Bank, State Bank of India, ICICI Bank, Bharat Financial Inclusion, Kotak Mahindra Bank, Reliance Capital, PNB Housing Finance, Federal Bank, Magma Fincorp, and Yes Bank. The net asset value at which an investor can purchase the units of Reliance Banking Fund is Rs. 267.5679 as on June 20th, 2018 and the assets managed under this scheme are worth Rs. 2,997 crores as on May 31st, 2018. Reliance Banking Fund has been rated four stars by Value Research. The percentage of investment it has made in various types of equities such as Giant-cap, Large-cap, Mid-cap, and Small-cap is 52.27, 6.94, 35.59, and 5.20, respectively. The schemes that are in comparison with Reliance Banking Fund are Aditya Birla Sun Life Banking & Financial Services Fund – Regular Plan, ICICI Prudential Banking and Financial Services Fund, Invesco India Financial Services Fund, and SBI Banking & Financial Services Fund – Regular Plan with former two being rated five stars and latter two being rated four stars each by Value Research. You can visit its website to know more about Reliance Banking Fund by Reliance Mutual Fund. To understand about the various risks involved, consult a financial advisor who is experienced and educated, who can help you by clarifying the doubts you may have. Have a clear mind before making the final decision.