Balanced Funds Record Higher NAVs, Post Up To 18% Returns

Updated: Jan 23 2003, 05:30am hrs
Balanced funds showed a significant improvement during the last one year. The net asset value (NAV) of these funds moved upward, registering positive returns of four to 18 per cent. An analysis of 15 schemes, including various options offered by individual funds dedicated to the IT consulting and services, banks, commodities, chemicals, pharmaceuticals, automobiles manufactureres, household products, public sectors, construction & engineering etc shows an average positive return of 11.22 per cent between January 21, 2002 and January 21, 2003. Among these 15 funds, Escorts Balanced Fund-Growth Option leads the pack with the highest positive return of 17.94 per cent during the study period.

The funds NAV rose from Rs 11.09 to Rs 13.08. The asset of the fund has 60.95 per cent in equity, 11.37 per cent in bonds and 27.69 per cent in cash and cash equivalents. Among the equity, Escorts Balanced Funds had highest investment in SBI (7.74 per cent as on December 31, 2002).

IDBI-Principal Balanced Fund-Growth Plan comes second with a positive return of 17.80 per cent as its NAV rose from Rs 8.71 to Rs 10.26. The scheme has the highest investment in I-Flex Solutions (5.36 per cent as on December 31 2002). Next is IDBI-Principal Balanced Fund-Dividend Plan and Franklin India Balanced Fund-Growth, which registerted positive returns of 16.93 and 15.19 per cent respectively. While the NAV of Franklin India Balanced Fund-D rose from Rs 8.99 to Rs 10.34, the GIC Balanced Funds NAV rising from Rs 9.21 on January 21, 2002 to Rs 10.24 on January 21, 2003, registering a positive return of 11.18 per cent.

The top five, in terms of NAV as on January 22, 2003, are JM Balanced Fund-G (Rs 16.71), Tata Balanced Fund (Rs 13.91), Escorts Balanced Funds-G Option (Rs 13.08), Escorts Balanced Fund-D Option (Rs 11.84) and HDFC Balanced Fund (Rs 10.82). Among them, the highest rise in NVA was observed in the case of Escorts Balanced Fund-G Option. One interesting thing is that all the Balanced Fund schemes showed a positive return during the study period.

The rise in NAV of all balanced funds was due to their high exposure in major old economy stocks like SBI, Mahindra and Mahindra, Reliance Industries, ITC and HPCL. The share price of SBI rose by 39.3 per cent to Rs 299.9 on January 21, 2003 from the level of Rs 215.30 on January 21, 2002.

Another heavyweight HPCLs price rose by 79.4 per cent during the same period.

The Balanced funds also had an exposure in topline IT stocks like I-Flex Solutions, Digital Globals, MTNL, Infosys Technologies, Wipro and Satyam Computers. The share price of Digital GlobalSoft rose by 2.6 per cent to Rs 586.3 on January 21, 2003 from the level of Rs 571.65 on January 21, 2002.