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After the impressive rally witnessed over the last 18 months, equities have turned choppy. The benchmark indices — Nifty and Sensex —— have lost over 6 per cent in the past month.
Investing a portion of your assets in a balanced fund with a good track record can help shield your portfolio from undue losses. Investors with a moderate risk appetite can consider buying units of Franklin India Balanced Fund.
After a lacklustre performance in 2012-13, the fund made a comeback in 2013-14. It has not only bettered equity Indices — Nifty and BSE 200 — across one-, three- and five-year time frames, but has also delivered gains higher than the category average. During the 2008-09 correction phase, even as the BSE 200 Index lost about 61 per cent, the fund managed to arrest the slide in its NAV at less than 40 per cent. Similarly, in 2012-13, the fund had managed to contain losses better than its benchmark.
Quality bets At the same time, the flexibility to invest 65 per cent of its assets in stocks across the market cap curve has helped the fund deliver benchmark-beating returns during the recent rally phases.
The fund’s NAV has jumped by over 80 per cent since August 2013, higher than the 65 per cent gain in the BSE 200 Index.
This outperformance was thanks to Franklin India Balanced’s bets in the small- and mid-cap space. For instance, small- and mid-cap stocks, such as YES Bank, Amara Raja Batteries, Balkrishna Industries and Torrent Pharma have more than tripled during this period. Other picks, such as Eicher Motors and Gujarat Pipavav Port have delivered five-fold gains since August 2013.
Besides the stellar run in equities, the sharp rally in G-Sec prices, spiced the scheme’s returns.
Over the last six months, Franklin India Balanced Fund has loaded up stocks in the financials, auto and auto ancillary space. On the debt front, the fund has lowered its average portfolio duration from 7.31 years in December 2014 to 3.87 years as of April 2015. This can insulate the scheme’s performance from the volatility in bond prices, should the RBI decide to hold lending rates at current levels.
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