Investors wishing to take the safe route in the current volatile markets can buy units of ICICI Pru Balanced fund. It consistently outperformed its benchmark — Crisil Balanced — and the category average returns over one-, three- and five-year periods.

The level of outperformance over the category average has been in the range of 4-5 percentage points. The fund has beaten peers such as UTI Balanced, Canara Robeco Balanced and Tata Balanced over these periods.

Over the past three- and five-year periods, it has been among the top-quartile of funds in its category. Use systematic investments in the fund to diversify your portfolio.

Diffused exposure

The allocation to equity is between 65-75 per cent. ICICI Pru Balanced takes significant exposure to mid-cap stocks (less than ₹7,500 crore market capitalisation). This has been to the tune of 20-25 per cent of its portfolio. Exposure to individual stocks is well diffused though. In the debt part, the fund takes safe bets, with exposure mostly to government securities and highly-rated instruments, such as corporate bonds and debentures.

The fund has been able to contain downsides and has managed to participate in rallies in recent years. Banks and software are key sectors in its portfolio. Along with pharma, they form a significant chunk of its holdings.

The fund made a timely entry into the auto ancillary sector in early 2010 and went on to build on the gains made in the segment. Stocks such as Balkrishna Industries and Motherson Sumi Systems have delivered good returns. It has diluted exposure to sectors such as non-ferrous metals and chemicals. On the other hand, construction projects and media & entertainment got higher allocations. City Union Bank, a mid-cap stock, was inducted into the portfolio in the past six months and is performing well. Britannia, Bajaj Finserv and Sanofi India are some of the other picks of the fund. The top ten stocks account for only 35 per cent of the portfolio.

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