DSPML Balanced Fund gives healthy returnsConservative investors may invest in DSPML Balanced Fund
11 May 2008
Conservative investors may invest in balance fund. Balance fund which is a mix of debt and equity offers investors the opportunity to earn equity-linked returns. It reduces downside through their exposure to debt instruments.
The debt portion in balanced funds has not seen healthy returns in recent years on account of the tightening bias to interest rates.
As domestic interest rates likely to rise over the next six months, the debt portfolios of balanced funds may improve their return potential.
The fund has delivered an annual return of about 37 per cent that is more than its benchmark which was 26 per cent.
DSPML Balanced Fund's track record over the past five years returns stand at 37 per cent (annualized), 3-year returns at 33 per cent and one year returns at about 28 per cent for diversified funds.
In its equity portfolio, the fund holds for large-cap stocks such as L&T, Reliance, ONGC and Infosys, though mid-cap picks such as UTV Software and Gujarat Alkalis also feature down the line.
The equity portfolio seems very actively churned, with Reliance Communications, Tata Steel and GSK Consumer being some of the recent adds.
The debt portfolio of the fund has mainly concentrated in two or three securities, with floating rate bonds from HDFC, IDBI and LIC Housing being the key holdings.