Franklin India Balanced Fund which has trailed its benchmark in only one year out of the last 15, it is an ideal fit for conservative investors. It takes very few risks both on its equity or debt market investments.
Franklin India Balanced Fund mandate allows an asset allocation of 50 to 75 per cent in equities. But, in practice, the fund has maintained about a 65-35 allocation between equity and debt on a steady basis. The equity style followed growth at a reasonable price. The fund manager also uses a macro overlay to align the sectoral exposure in line with the economic growth outlook.
In debt, the focus is on generating regular coupon income, along with some capital appreciation through active duration management. The fund generally invests in a portfolio comprising of government securities and corporate bonds with high credit ratings and high secondary market liquidity. The fund has been moderate with its duration calls, with the latest average maturity on bonds at 4.56 years.
In the last one, three and five years, the fund has outpaced the balanced benchmark but lagged behind the category. With its stated focus on low volatility returns, this fund has navigated bear markets as well as bull phases. It delivered sizeable market outperformance in 2006, 2014 and 2015. It managed to contain losses well in 2011 after lagging the indices in the bear year of 2008. In recent times, the fund has been quite overweight on large caps relative to peers and underweight on mid-caps.
A good option for investors who would like to limit downside.
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