Reliance Equity Opportunities Fund (G) Underperforms The Sensex Over Most Of The Period

Background: Reliance Capital Limited is the sponsor of Reliance Capital Assets Management Ltd set up in June 1995. Reliance Capital Ltd. is a member of the Reliance Group and has been promoted by Reliance Industries Limited (RIL), one of India’s largest private sector enterprises. The fund house manages assets worth Rs 77764.84 crore at end of November 2007.

Reliance Equity Opportunities Fund (G) an open-ended equity diversified scheme launched in February 2005. The investment objective of the scheme is to generate capital appreciation and provide long-term growth opportunities by investing in a portfolio constituted of equity and equity related securities. The secondary objective is to generate consistent returns by investing in debt and money market securities. The minimum investment amount is Rs.5000 and in multiples of Re.1 thereafter. The unit NAV of the scheme was Rs.29.74 as on 3 December 2007.

Portfolio: The total net assets of the scheme decrease by Rs.103.12 crore to Rs.2655.46 crore in October 2007.

Reliance Equity Opportunities Fund (G) took fresh exposure to only one stock in October 2007. The scheme has purchased 5.05 lakh units (1.83%) of Alstom Projects India in October 2007.

The scheme completely exited from eight stocks in October 2007. The scheme completely exited from Lakshmi Machine Works by selling 1.53 lakh units (1.75%), Hinduja TMT by selling 9.46 lakh units (1.62%), DLF by selling 5.15 lakh units (1.54%), Dish TV India by selling 43.92 lakh units (1.27%) and Aventis Pharma by selling 2.49 lakh units (1.14%) among others in October 2007.

Sector-wise, the scheme took fresh exposure to Engineering - Turnkey Services at 1.83% in the October 2007.

Sector-wise, the scheme exited completely from Textile Machinery at 1.75%, Computers - Software - Medium / Small at 1.62% and Cigarettes at 1.12% in October 2007.

The scheme had highest exposure to Areva T&D India with 6.99 lakh units (6.25% of Portfolio) followed by Jaiprakash Associates with 8.79 lakh units (4.83%), BEML with 7.98 lakh units (4.69%), Siemens with 5.79 lakh units (4.26%) and among others in October 2007.

It reduced its exposure to UltraTech Cement by selling 1.02 lakh units to 6.24 lakh units (0.62%), Nirma by selling 3.87 lakh units to 26.24 lakh units (0.41%), Wyeth by selling 2363 units to 9.81 lakh units (0.21%) and Reliance Industries by selling 85885 units to 3.99 lakh units (0.18%) among others in October 2007.

Sector-wise, the scheme had highest exposure to Computers - Software – Large at 8.17% (9.15% in September 2007), followed by Textiles - Products at 6.98% (6.17%), Electric Equipment at 6.25% (5.10%), and Pharmaceuticals - Indian - Bulk Drugs & Formulation at 5.84% (6.00%) among others in October 2007.

Sector wise, the scheme had reduced exposure Entertainment / Electronic Media Software to 3.08% (by 1.81%), Pharmaceuticals - Multinational to 1.69% (by 1.35%), Computers - Software – Large to 8.17% (by 0.98%) and among others in October 2007.

Performance: The scheme underperformed the category average over all time periods. It has underperformed the Sensex over most of the periods.

Over three-month period ended as on 5 December 2007, the scheme posted 26.26% returns underperforming the category average of 27.63%. It has under performed the sensex that has posted 27.11% returns during the same time period.

Since inception, the scheme posted 199.34% returns underperforming the category average of 316.01%.