BIRLA SUN LIFE
95 Last year, the fund delivered 70.2 per cent, while the category average was 61 per cent. The bias towards mid-cap stocks clearly worked in its favour. Till 2002, the fund tilted more towards large caps but when the rally started in 2003, it changed tack and gave in to the smaller fare. Having said that, the fund has been flexible in moving across capitalisation in line with market conditions.
The flexibility also extends to its changing composition. Its equity allocation has averaged around 69 per cent over the past year. The fund's mandate permits the equity allocation to fluctuate between 50 and 75 per cent of its assets, and it has always stayed within that limit.
When Nishit Dholakia and Satyabrata Mohanty took over in June 2009, changes were apparent in the fund. A lot of shuffling took place in sector bets, while the number of stocks rose significantly to touch 60. The fund is fairly diversified and single-sector allocation has rarely crossed 16 per cent since 2006.
On the debt side, the portfolio has always been skewed towards bonds and debentures, as well as G-Secs. Over here, it will not be surprising to find aggressive maturity bets, should the need arise.
| Trailing Returns | |
| Period | Return (%) |
| 3-month | 8.66 |
| 6-month | 15.20 |
| 1-year | 32.50 |
| 3-year | 14.59 |
| 5-year | 20.04 |
Over the past 14 years, this fund has underperformed its peers just three times. It rewards investors who hang in for the long term. Its five-year annualised return of 21 per cent (category average, 16 per cent) as on July 31 bears testimony to that.
DSPBR BALANCED
This one is not a stellar outperformer but it does not tumble like a pack of cards in a downturn. When Apoorva Shah took over the fund in 2006, there was no dramatic change in the portfolio, except that the mid-cap allocation began to get a bit more generous. But that does not imply an aggressive portfolio. In fact, Shah shies away from aggressive sector bets and prefers dabbling in a large number of sectors.
The number of stocks, too, is huge and it has gone as high as 90 (August 2008), though a significant number of these have a tiny allocation. While this could also result diluted returns, the reason for such a bloated portfolio is that this fund seeks to combine the portfolios of the large cap fund (DSPBR Top 100) and the small and mid-cap fund.
The fund largely remains within the 65-75 per cent equity band.
| Trailing Returns | |
| Period | Return (%) |
| 3-month | 8.18 |
| 6-month | 13.74 |
| 1-year | 32.09 |
| 3-year | 16.41 |
| 5-year | 20.84 |
Despite the highly diversified portfolio, Shah does a large amount of churning. Though the fund over the years has dabbled in various debt instruments, it largely maintains a conservative stance on the debt side. A good bet for the conservative investor.
HDFC PRUDENCE
Last year, the fund silenced all critics. Having outperformed till 2006, it turned out to be very average in 2007 and 2008. But it obviously has not lost steam.
Fund manager Jain has been aggressive with the equity allocation but ensured that investors were well rewarded. An annualised return of around 25 per cent over the past 10 years is nothing short of impressive. None of its peers have been able to match such a performance.
Jain sticks to his convictions and does not get carried away by momentum plays. When other fund managers were betting on real estate and energy, he was conspicuous in his lack of enthusiasm. In 2007, exposure to auto was around eight per cent while allocation to energy was lowered to around three per cent by December. BSE Auto delivered three per cent, while BSE Oil & Gas and BSE Power delivered 115.25 per cent and 122 per cent, respectively.
Jain has no problem moving against the herd, as reflected in his sector selection and even in the stock picks. He has not invested in Reliance Industries since April 2009, though all peers hold that stock.
| Trailing Returns | |
| Period | Return (%) |
| 3-month | 10.88 |
| 6-month | 19.50 |
| 1-year | 47.13 |
| 3-year | 18.75 |
| 5-year | 23.15 |
Though the fund has always stayed well within its equity limit (75 per cent), the allocation to equity since mid-2006 has always been above 70 per cent. The fund manager got punished for this in 2008 but was vindicated in 2009. Though the fund follows an all-cap strategy, the portfolio is tilted towards mid and small caps. However, the portfolio is very diversified, currently at 72 stocks. On the debt side, the fund largely invests in debentures of the financial sector, with small exposure to GOI Securities and Structured Obligations.
