Focussed on quality

FUND PICK: FT India Balanced

FT India Balanced has a track record of consistent performances.

A large-cap dominated equity portfolio along with cautious debt holdings mean that FT India Balanced would make you sleep well even in uncertain times.

You might not get extraordinary returns here, but this fund's consistency and 14.70 per cent annualised returns since its launch in December 1999 make it a classic balanced fund.

An equity allocation between 60 to 70 per cent (close to 70 per cent in recent times) looks aggressive. But the fund manager has historically kept a quality portfolio by maintaining a large-cap bias and limiting the exposure to riskier mid-cap stocks to around 30 per cent.

This, however, seems to be changing in the recent months, as the allocation to small-caps has been on the rise. As per the September 2005 portfolio, the small-caps accounted for 9 per cent of its equity portfolio. On the debt side, the fund prefers high quality corporate bonds and gilts.

When mid-caps raced ahead in 2004, FT India Balanced clocked a below average performance because of its large-cap stocks. A low exposure to financial services stocks was one reason for its mediocre performance that year.

The fund had been maintaining nearly 9 per cent exposure to banking stocks till the first quarter, but as banking stocks hit a rough patch in the second quarter, it quickly cut the allocation and missed the rally when they rebounded later.

As on October 18, 2005, the fund has gained 18.51 per cent from the beginning of the year, which is below the category average of 20.64 per cent. But over its tenure, FT India Balanced's track record has been inspiring.
 

TOP HOLDINGS
Equity Holdings (As on September 30, 2005)	Value  (Rs Cr)	Net assets  (%)
Hindalco Industries	10.19	5.32
Grasim Industries	9.25	4.82
Kotak Mahindra Bank	8.75	4.57
ICICI Bank	8.34	4.35
Pidilite Industries	7.14	3.72
Motor Industries Co.	6.70	3.50
Infosys Technologies	6.55	3.42
Tata Consultancy Services	6.27	3.27
Maruti Udyog	6.21	3.24
ONGC	4.94	2.58
NDTV	4.76	2.48
Exide Industries	4.74	2.47
Larsen & Toubro	3.95	2.06
Madras Cements	3.77	1.97

The fund had an inauspicious start in December 1999. It lost a sixth of its value by 2000-end. However since then, it has gained in stature. In bullish 2003, it beat the category average comfortably with a 73 per cent return.

With a track record of consistent performance, FT India Balanced figures among the better funds in the category.

- Value Research

Returns in % as on October 20, 2005 

EQUITY FUNDS
Average category returns (%)
	1 month	1 year
FMCG	2.73	78.83
Banking	-11.21	64.53
Tax planning	-10.15	57.07
Auto	-8.38	50.31
Diversified	-8.57	50.24
Technology	-5.94	40.00
Index	-7.28	37.57
Balanced	-5.67	33.01
Pharma	-8.56	25.52
Petroleum	-6.51	12.77
LEADERS
Balanced funds
	1 month	1 year
SBI Magnum Balanced	-4.70	61.50
HDFC Prudence	-4.50	50.55
Kotak Balance	-6.39	47.45
BOB Balance	-9.23	43.12
Birla SunLife 95	-5.25	42.49
ING Vysya Balanced	-5.97	40.38
Prudential ICICI Balanced	-5.60	40.21
Escorts Balanced	-4.54	39.27
Can Balanced II	-5.82	36.68
Tata Balanced	-7.63	34.98
LAGGARDS
Balanced funds
	1 month	1 year
Can Balanced Plan	-8.63	14.11
Escorts Opportunities	-4.82	16.12
UTI Balanced	-5.13	21.32
LIC Balanced - Plan C	-8.64	21.58
Unit Scheme 2002	-3.7	23.2
Sundaram Balanced	-3.61	25.07
JM Balanced	-7.59	26.85
Birla Balance	-3.19	28.7
HDFC Balanced	-5.18	28.76
DSP ML Balanced	-4.94	29.33
Source: www.mutualfundsindia.com

Equity fund performances continued to lag due to downsides in equity markets. Banking sector funds (-11.21 per cent) and technology funds (-10.15 per cent) were the worst affected of the lot during the past month. FMCG funds (2.73 per cent) were the only ones to manage positive returns in the past month.

As far as one-year performance was concerned, FMCG funds continued to be tops with a return of 78.83 per cent, followed by banking (64.53 per cent) and tax planning funds (57.07 per cent).

Petroleum sector funds were at the bottom of the table with an annual return of 12.77 per cent. Balanced funds returned -5.67 per cent for the month and 33.01 per cent for the year.