Well-balanced across market cycles
In its more than two-decade history, Tata Balanced Fund has had its share of ups and downs to stabilise as a consistent performer over the past decade. It is a well diversified balanced fund, with a tilt of 65-75 per cent in equity and equityrelated instruments and remaining in debt and money market instruments. However, the average equity exposure is closer to the Past performance (%) higher end of the band. The fund aims to provide income distribution through long-term capital gains, while emphasising the importance of capital appreciation.
The portfolio is well-diversified across stocks and sectors. Within equities, the fund maintains a higher allocation to quality large-cap stocks, with about 40 per cent of the equity allocation going to small- and mid-cap stocks in a portfolio of 76 stocks. The investment strategy followed is based on the growth-at-reasonable price approach for stock selection. The portfolio construction is such that allocation to a stock is not more than 4-4.5 per cent. Further the fund managers mostly follow a buy and hold strategy in high quality businesses.
On the performance front, the fund has posted consistent returns with returns since inception hovering around 16.5 per cent, matching the average returns posted by S&P BSE Sensex over the years. On the debt side, investments are in quality debt papers across both long-term and short-term papers and government securities, indicating high portfolio credit quality. A cause of concern is the frequent change in fund managers in recent years, which had dented its short-term performance.
The fund’s discipline to maintain equity-debt allocation has ensured that investments in the fund fare well over time. It is also the reason why this scheme finds way in the OLM Elite in the Safe Player category.