As volatility has become new normal in markets, themes that have the potential to generate stable and consistent returns are most sought-after.
Given this fact, balanced schemes offer reasonably good comfort for retail investors as by the very nature of the funds it offers to a large extent the best of two worlds: equity and debt.
Among the balanced schemes, Birla Sun Life Balanced '95 scheme which has a performance record of over 20 years is a consistent and stable performer not only in bull phase but also in bear phase of the markets.
The scheme's fund managers Mahesh Patil and Pranay Sinha follow a multi-cap approach (mostly large companies) when it comes to investing in equities. On the debt side, the scheme follows both accrual and duration strategies.
In a falling interest rate scenario, duration strategy of buying bonds mostly shorter duration and in a stable interest rate scenario, the scheme buys and holds bonds. Largely, the scheme invests in corporate bonds.
Due to the multicap approach on the equity side, and accrual and duration strategies on the debt side, the fund has been able to beat its peers and benchmark by a fair margin.
On the debt side, the scheme has bonds with average maturity period of 16.4 years and on the equity side since the scheme has mostly large-sized companies, the scheme is best suited to a longterm conservative retail investor.