Unit Scheme 95 has diligently trodden a middle path. It has a solid track record of consistent returns. On a relative performance scale, it is ranked 3 among 16 balanced funds over the past five-years, with a 17.3% return. For its robust long-term performance, one should attach less weight to its recent under performance. Pitched as dynamic balanced fund, it re-aligns its stock and bond mix in a range of 40-60%. The allocation range provides it reasonable maneuverability to show its view on the market. Unlike other equity and balanced funds of UTI, its equity portfolio has been much leaner though well diversified.
In its initial phase, it was overly cautious and restricted its equity allocation to 15%. This helped it keep its neck over water, through the static market during 1995-98. And in the market surge of 1999, it made rapid strides with a 65% rise. Perhaps, the charming aspect of the fund was proven in slippery year 2000 when it gained 26% while most others were in red.
The fund has actively aligned its allocation to weather a tough equity market and to ride a surge. For instance—the portfolio was tilted to bonds through 2001 and is more into equities now. Not being wild with its allocation moves and diversity of equity portfolio across time has been trick behind its consistency. Like, the fund was able to ride the technology boom but in a limited way. On the plus, the tech wreck has been far less painful for the fund. To its credit (or luck) it had a precisely timed exit from technology stocks and a move towards bonds in mid-2000. This not only helped it escape the market meltdown but also positioned it to ride the bond rally.
In its equity portfolio, it has largely been in to large-cap stocks across sectors and a small stake in the happening segment of the market. For instance, it recently drifted towards mid-caps. Its stake in bonds is also well spread across high yield (below AAA rated bonds), AAA bonds and gilts.
US-95 has built a strong case for itself as an all weather fund. A good choice for investors seeking long-term growth with less turbulence than equities. But, don't mistake it to be an income offering, as equity tilt and discretionary allocation moves can throw surprises.