6 best balanced funds

6 best balanced funds

In Why you must look at balanced funds, we spoke of balanced funds. Here we list out the best picks.

All returns and data are as of July 31, 2006
All returns are in percentage
All returns are benchmarked against the Crisil Balanced Fund Index.

DSPML Balanced

With a large-cap dominated portfolio, the fund has delivered good returns over the years. Its five-year annualised return of over 28% is proof of that. Because of the large-cap stocks in its portfolio, it has lost less than other balanced funds during the recent collapse. 

Even when the fund manager increased allocation to large-cap and mid-cap stocks, he made sure he did not go overboard. This has resulted in a large-cap dominated, diversified equity portfolio with good debt holdings.

Returns

Crisil		Fund
22.67	1-year	28.85
23.40	2-year	31.91
24.39	3-year	34.70
-	5-year	28.67

FT India Balanced

Invest in this fund if you prefer stability over flashy returns. The fund stuck to its large-cap orientation but also invested in mid-cap stocks. This fund has not been an exceptional performer as other funds with mid-cap stocks raced ahead. But, its five-year annualised returns of almost 29% make it a very compelling option for any balanced fund investor. 

This fund is not conservative; equity often comprises of more than 65% of total investments. However, the stocks are mainly large-caps and the investments are well spread out across 35 to 40 stocks.

Returns 

Crisil		Fund
22.67	1-year	25.37
23.40	2-year	29.06
24.39	3-year	33.33
-	5-year	28.56

HDFC Prudence

Every investor desires a fund that can deliver excellent returns year after year, as well as protect their money during tough times. That's a tough task, but this fund has lived up to it well.

In the last 10 calendar years, the fund has outperformed the Sensex every year, an achievement no other equity fund can claim. When the stock market fell in the past three months, other balanced funds lost over 13% on an average; this fund just lost 6.24%.

The fund manager has spotted the right opportunities at the right time. For instance, in 2003, the fund moved from a traditional large-cap portfolio to a mid- and small-cap one. In 2002, when energy stocks were shooting up, the fund manager increased exposure to this sector from 4.3% in January to 16.7% by March.

Currently, the fund has 75% of its investments in equity, so expect it to be volatile for a while.

Returns

Crisil		Fund
22.67	1-year	28.33
23.40	2-year	41.20
24.39	3-year	40.01
-	5-year	39.14

Kotak Balance

Kotak Balance's aggression proves rewarding but it can also test your nerves in turbulent times. Its performance in the last two calendar years speaks much about its ability to generate returns. But the ride can be bumpy.

The fund will appeal to aggressive investors but may not be right for conservative investors as it is a volatile fund. But it compensates for the higher volatility with good returns. It is an agile fund and moves quickly between sectors and stocks. Its stock investments are spread over 20 to 30 stocks.

Returns 

Crisil		Fund
22.67	1-year	30.20
23.40	2-year	43.10
24.39	3-year	40.22
-	5-year	30.30

Pru ICICI Balanced

This fund is a stable and consistent performer. Launched in October 1999 during the peak of the tech boom, it delivered 68% in five months but delivered a loss of 45% by the end of 2000 when the tech boom ended. Things changed for the better from then on.

Right now, large-cap stocks constitute almost 70% of its total equity allocation. Given the prevailing uncertainty and volatility in the stock market, this looks like a wise move.

Do not expect any miracles from this fund. Go for it if you want stability and consistency.

Returns

Crisil		Fund
22.67	1-year	27.98
23.40	2-year	35.56
24.39	3-year	35.53
-	5-year	27.67

UTI Balanced

Being very conservative, this fund has been a laggard in recent times. Even with the stock market boom in the recent years, this fund rarely put more than 61% of total investments in equity. In the recent months, it has turned even more conservative by reducing equity exposure to 55%.

Within this allocation, the fund invests in mid- and small-cap stocks. Yet, its performance has not been impressive.

However, the fund scores low on volatility.

The fund has found the going tough in the last few years. Investors will have to keep a close watch and gauge how the new manager takes things forward.

Returns 

Crisil		Fund
22.67	1-year	20.98
23.40	2-year	26.97
24.39	3-year	28.25
-	5-year	23.44