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K Balance

By not compromising on its diversified character in search of astronomical returns K- Balance has struck the right chord. However, with markets in turmoil it may be a while for meaningful returns

By not compromising on its diversified character in search of astronomical returns K- Balance has struck the right chord. However, with markets in turmoil it may be a while before meaningful returns come up.

K Balance, a hybrid fund seeks capital appreciation and regular income with a portfolio spread across equity and debt instruments. Launched in late 1999 amid the technology wave, the fund took off on a well-balanced note - investing equally across the volatile equity and relatively placid debt instruments. "K Balance will generally have an equity exposure of around 53% and we compulsorily sell when equity exposure exceeds 60% and buy when it falls below 50%," says Chief Investment Officer S N Rajan.

Further, the fund held a relatively diversified portfolio for its equity basket, limiting the exposure to technology stocks at 25% while diversifying across other sectors. However, the fund has always had a tilt towards growth sectors that account for 30% of the corpus. Further, the fund has scaled down exposure to technology stocks to a tenth of the portfolio to re-group towards old economy stocks such as diversified industries and finance.

On the debt side, the fund invests in sovereign bonds and other quality instruments. However, the fund has been caught on the wrong foot in recent times with 11.32% exposure to IDBI, which has been recently downgraded. The portfolio maturity is not available for comment on the interest risk management.

While the balanced fund's strategy is well placed, with equity arkets on a tailspin for a larger part of its tenure, the fund is in the red. However, at Rs 8.98, it is still one of the better placed balanced funds of 1999. While it may be a while before the funds finds ground, K Balance looks set to offer a balanced portfolio, which will not be compromised in pursuit of astronomical returns.