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Balanced Funds shine as equities run up, rates decline

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Press Trust of India Mumbai
Last Updated : Apr 27 2015 | 9:42 PM IST
Balanced Funds performed better than monthly income plans, debt and even large-cap equity peers last fiscal, riding on interest rate cuts and continued firmness in equities, according to Crisil-AMFI Balanced Fund Performance Index.
These funds typically invest over 65 per cent of their corpus in equity and remaining in debt and cash, which allows them to tap run-ups in either category.
The Crisil-AMFI Balance Fund Performance Index gave a return of 37.17 per cent in 2014-15 compared with 20.92 per cent by monthly income plans and 12.47 per cent by debt.
Within balanced category, higher allocation to equity especially in the last one year helped Crisil fund rank 1 and 2 outperform their peers. Balanced category also outperformed the CRISIL-AMFI Large Cap Fund Performance Index in most time horizons considered, a crisil release said.
On the debt side, the yield on the 10-year gilt securities fell over 100 basis points last fiscal, it added.
A portfolio analysis of Crisil-ranked balanced funds shows funds increased their gilt exposure to 13 per cent on average last fiscal, compared with 8 per cent in FY14, thereby benefiting from interest rate fall. Further, higher allocation to gilt especially in the last one year helped Crisil fund rank 1 and 2 outperform their peers.
The latest Crisil Mutual Fund Ranking covers close to 88 per cent of the average assets under management of open-ended schemes at the end of March 2015.

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First Published: Apr 27 2015 | 9:42 PM IST

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