ING Balanced is a balanced fund launched in April 2000. Entry in to the fund is at a load of 1.5% while exit is at NAV. In its short tenure the fund has not given any dividends.
The fund seeks capital appreciation by investing approximately 60 % of its investments in equity instruments. In line with this the fund has struck a delicate balance with its equity investments which account for 52% of its corpus on an average and 45 % of the corpus in October 2000. While, the fund has struck a fine balance, between equity and debt, it has been extremely aggressive with its equity investments - the entire equity holding is allocated to the volatile ICE stocks. This emanates from the fund’s approach of building a portfolio of core holdings within reasonable risks, rather than perusing unproductive diversification.
Further, the fund scouts for companies with quality management and sustainable growth potential. With this the fund has built a concentrated portfolio, with stocks such as Infosys, Satyam, Wipro and Zee accounting for 33 % of the corpus. The debt portfolio of the fund comprises of AAA rated instruments. With such concentrated technology holdings it is not surprising that the fund’s performance is closely linked to that of the technology sector as a whole. When the technology stocks were on a upbeat, the fund convincingly outperformed the funds in the VR balanced category, and has lost out when they are down. With its NAV hovering around Rs 8.38, the fund has shed 16.2% of its face value.
While ING Balanced has marginally reduced its equity exposure, the fund has emerged an aggressive balanced fund in its brief tenure with a tech-heavy portfolio.