Making a sound investment decision is a necessity to ensure fund security and high yields. Thus, the prime duty of every investor is to analyse the schemes well before putting the capital in them. Among various investment alternatives, only a few are completely suitable for our goals and we must pick the same for our portfolio. Reliance Small Cap Fund and many other schemes have a stagnant record in the industry due to which they are often recommended for wealth creation. Here in this write-up, you will come to know about the reasons for which the Reliance Small Cap is the first choice of every investor seeking wealth creation.
Investment Objective
With the primary aim of generating long-term capital appreciation, this scheme invests predominantly in the equity and equity-related instruments of small-cap companies. Furthermore, it also aims at generating consistent returns by investing in the debt and money market instruments which yield regular income in the form of interest. Reliance Small Cap Fund (G) is an open-ended fund which allows the investors to redeem the capital whenever required, and the growth style investment provides the wealth creation opportunities.
Easy Investing
The investors of
Reliance Small Cap Fund growth can put their money in a convenient form following either the SIP (systematic investment plan) route or the lump sum method. The minimum investment amount is Rs.5000 for lump sum while for SIP, it is just Rs.1000 which can be initiated online and can be made for longer tenure to avail the benefits of compound interest as well as rupee-cost averaging.
Investment Philosophy
Reliance Small Cap Fund is focused on generating superior risk-adjusted returns for which the fund manager invests in the small size companies having high growth potential. The small-cap stocks are defined specifically for this scheme to mean the ones whose market capitalisation falls between the highest and the lowest market capitalisation of companies on the S&P BSE Small Cap. With such investments, this scheme aims at gaining twin advantage of high growth and relatively lower valuation. The fund managers at Reliance Mutual Fund focus on identifying good growth businesses having reasonable size, quality management, and rational valuation. They also adopt prudent risk-management techniques such as margin of safety and diversification across various sectors and stocks of the companies to generate risk-adjusted returns over a period of time.
Suitability of Reliance Small Cap Fund
The fund has a high-risk appetite as it has investments in the small companies which are highly affected market swings. The investors seeking long-term capital growth and want to invest in the equity and equity-related securities of small-cap companies should park their monies in this scheme.
Portfolio Analysis
It is of prior importance to know in advance where the funds are being invested in the scheme which we are going to buy for our portfolio. Reliance Small Cap Fund has a significant portfolio which is being designed while keeping the primary objective in mind. It has the majority of its funds invested in the equity securities of companies falling in diversified sectors. The industries in which it has its holdings are consumer durable goods, industrial capital goods, chemicals, textile products, banks, and miscellaneous. The top six holdings of Reliance Small Cap Growth Fund are - Navin Fluorine International Ltd., VIP Industries Ltd., Seya Industries Ltd., West Coast Paper Mills Ltd., RBL Bank Ltd., and Zydus Wellness Ltd.
The above elements which are discussed about the Reliance Small Cap Fund make it evident that it has the potential to generate exceptional returns and fulfil the desire of wealth creation for the investors. Thus, it won’t be wrong saying that Reliance Small Cap Fund (G) is a safe investment for long-term investors who are willing to take a higher risk to achieve capital appreciation in a tenure of more than ten years. If you are among those, then you must go for it.
In this article, an attempt has been made to clarify the reasons which make Reliance Small Cap Fund (G) the best buy for long-term wealth creation goals. If you are looking for a long-term investment opportunity, then this article is a must-read for you.