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    Published On : Sat, Dec 5th, 2015
    Business News | By Nagpur Today Nagpur News

    Balanced Funds offer dual advantage of growth and safety in volatile times

    Jay Kothari
    Nagpur
    : The markets had run up quite a bit after the Lok Sabha election results last year. The recent correction on the back of global issues and a few disappointments on the reforms front have brought down valuations to more reasonable levels.

    Domestically, we are keenly watching various initiatives being undertaken by the government on the policy and reforms front as we believe this is going to be the single most important factor for our markets. Corporate earnings are currently subdued due to lack of demand momentum. With a likely improvement in the overall economy, we expect demand outlook to pick up going forward which will drive corporate earnings. The fall in the commodity prices have been beneficial on the raw materials front. Globally, U.S. interest rates and Chinese currency are two important factors to keep a close eye on as it has the potential to create global volatility.

    In the present scenario where the equity markets have exhibited quite a bit of volatility, balanced funds have emerged as an attractive investment options for investors who like the returns that equity provides along with the safety of debt. One such fund is DSP BlackRock Balanced Fund that has been in existence for more than 15 years and staged a smart turnaround in performance over the past year. DSP BlackRock Balanced Fund has given 16% compounded annual returns since inception in 1999. In terms of portfolio construction, there is a good balance of the portfolio mix with equity about 70%, while debt and cash comprises 30%. Further, DSP BlackRock Balanced Fund has been a strong performer in the recent period and delivered 11% returns in the last one year, outperforming its benchmark by a large margin which generated 2% in the same period.

    The scheme is suitable for investors who seek to generate long-term capital appreciation and current income from a portfolio constituted of equity and equity related securities as well as fixed income securities (debt and money market securities).Investors with moderate risk profiles can consider this product for their retirement planning and other long term financial objectives, through systematic investment plans or lump sum route.

    Speaking on the occasion, Senior Vice President & Fund Manager – DSP BlackRock Jay said, ‘’currently, the market is trading at the long term average multiple on a one year forward earnings basis and hence is not expensive. We are quite positive on the Indian equities with a long term view, given the reforms oriented government at the centre. Given the expected pick up in the reforms and GDP growth coupled with falling interest rate, we remain positive on sectors like private sector banks, automobiles, consumer durables, oil marketing companies, and capital goods sectors.”

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