Tuesday, February 17, 2009

Reliance Diversified Power Sector Fund

mr.SHAKTI wrote :
which you suggest to change the reliance power sector fund ? Its going to give good returns in next 2 years.


Dear Shakti,
I do not agree with you. I feel Reliance Diversified Power Sector Fund will face challenging and tough time going forward. The Power Sector itself is facing problems with regard to Raw Materials. The valuations are also on the higher side inspite of recent meltdown.
Most importantly, Reliance Diversified Power Sector Fund is the biggest fund in the country. With such a big corpus, and that too with a mandate to invest only in Power and Related Sectors, the fund will rather be an underperformer, at best a Average Performer. I suggest you to invest in this fund, only if are absolutely convinced about the Power Story and willing to ride out the volatility and stay invested for at least 5 - 7 years.
Otherwise, there are many other Good funds which are better placed than Reliance Diversified Power Sector fund.
Best of luck,
Srikanth Shankar Matrubai

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