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Showing Talent

A lot of intelligent stock picking and exposure to particular sectors has seen the fund outperform itself quite often. Find out what makes Tata Balanced is a worthwhile representative of its type

This year, this perennial outperformer has found itself near the head of the pack. A combination of low exposure to auto stocks, holdings in financial services and its long-term strategy in the basic-engineering, metals and energy space paid off. In the technology space, losses were minimised by astute stock picking and leveraging on smaller companies.

By and large, the fund plays it safe and does not make any adventurous moves. This was not the case earlier though. Last year, when the market corrected, it got badly hit and lost 25 per cent in a single month (May 12-June 13, 2006). The outcome was a swift move to large caps from a dominant mid-cap portfolio. This was a well timed lesson because large caps began to rally soon after. Over the past one year, it has been doing well and frequently outperforms the average.

Initially, one was advised to go with this fund if they were willing to nap during the bear phases since it performed dismally during market downturns. Not so after its portfolio revamp. This year, we were pleasantly surprised to find that the fund lost a mere (-) 1.55 per cent at the end of March 2007 (category loss: -3.23 per cent).

However, it has been very erratic in rebalancing its portfolio, swaying from a 65 per cent to 74 per cent exposure to equities.

Though one of the smallest of the four funds featured here, its size seems to have worked to its advantage. With its excellent performance this year, we are very bullish about the future of this fund.