Pioneer of the category, at one time we would have advised investors to steer clear. It would be the top performer one year (1996) and bottom of the pile later (1998). There would be moments when the equity portfolio would be dangerously compact with high allocations to few stocks. The fund’s equity allocation was known to shoot up to 80 per cent, yet there were times when it would dip so dramatically that it would get re-categorised as ‘Hybrid: Debt-oriented Aggressive’.

Despite its long and complex history and volatile past, Canara Robeco Balance makes a good case for itself.

Earlier known for its distinct large-cap bias, the fund began to take a more liberal exposure to mid and small caps from mid-2008 onwards. Yet Lahiri insists that “the fund follows a philosophy of growth at reasonable pricing with large-cap dominance. The portfolio is biased towards large caps companies with some value mid-cap picks.” Despite a leeway to go up to 75 per cent in equity, there has been a deliberate attempt not to cross the 70 per cent mark (it does happen, but rarely).

The fund has become much more diversified over time with stocks ranging between 44 and 49 and the top five holdings accounting for around 16 per cent of the equity exposure over the past one year. A radical change from allocation to a single stock touching 20 per cent and commonly crossing 10 per cent. In December 2005, allocation to the top five touched 59 per cent!

What has become evident over the past few years is its ability to contain the downside. Last year, despite a fund manager change, the fund delivered quarterly ahead of the category during market run ups and fell less when the reverse took place. Betting on Cement with stocks like Ambuja Cements, Ultratech Cement and ACC helped. Increased exposure to Financial Services and FMCG also played its role. On an average, in 2011, 32 per cent of the fund’s portfolio was in 19 stocks which either registered positive returns or fell less than the Sensex.

On the debt side, the average maturity of the fund is in line with its peers. “The fixed income allocation aims at accrual strategy and we primarily adhere to a buy-and-hold philosophy,” says Lahiri. While debentures and Certificates of Deposit (CDs) have been favourites, a significant portion is now held in term deposits.