For its prudence, this 4-star balanced has that extra oomph. It has a credible long-term record of positing reasonable returns with consistency. For this, it has closely maintained a 60:40 stock debt allocation, besides portfolio diversity across sectors. This diversity also meant that it owned BHEL, Bharat Petroleum alongside Infosys and Wipro across time period. This helped it participate in narrowly driven market rallies besides limiting downside during the technology crash. The focus on return stability has earned Zurich India Prudence five-star rating for a long period of time.
All this did not mean being managed mechanically. It has actively realigned its sector spread pretty reflecting its preference without getting overboard. Through 1999, its top sector was consumer non-durable, in 2000 -- technology, 2001 -- automobiles and this year its energy stocks (read Petroleum PSUs). Besides, its portfolio has largely comprised of large cap holdings, insulating it from liquidity concerns. The fund manager generally states his taste for stocks with a reasonable valuation, implying a tilt to value stocks. This is the reason why the fund was tentative with its technology even in the boom times.
For its 40% debt allocation, Zurich India Prudence has been almost passive, without getting venturesome in through 2001. It has largely been into AAA bonds and held sizable cash on occasions. As on June 30, it has nearly 20 percent in cash.
True to its name, Zurich India Prudence is a solid choice for investors seeking growth with stability with investment in a single fund.
This article was originally published on August 01, 2002.
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