The fall in net asset values (NAVs) of growth and tech-heavy schemes can be attributed to the recent meltdown in the markets. However, Balanced schemes seem to have aped the performances of their Growth counterparts lending credence to the view that fund managers have been guilty of poor diversification.

The table below highlights the performance of Balanced Schemes. With the exception of a handful, all Balanced schemes have given negative returns over the last month.

Open-ended Balanced Schemes	NAV (Rs)	Last week	Last month	Last year	Since inception
Unit Scheme - 1995 (Gr)	193.3	-1.5%	1.9%	79.3%	24.6%
Canpremium	11.1	-4.7%	1.4%	8.0%	12.9%
PNB Balanced Growth Fund	14.0	-1.8%	0.1%	0.0%	32.1%
Unit Scheme - 1995 (Inc)	170.2	-1.6%	-0.2%	71.4%	23.5%
Zurich India Prudence (Gr)	18.8	-1.5%	-5.3%	28.8%	16.8%
Dundee Balanced Fund (App)	8.2	-2.7%	-7.4%	0.0%	-6.5%
DSP ML Balanced (Growth)	10.7	-1.0%	-8.4%	0.0%	7.2%
Tata Young Citizens Fund	10.6	-4.4%	-9.2%	28.1%	19.7%
K Balance	10.0	-2.2%	-9.8%	0.0%	1.5%
Kothari Pioneer Balanced (Gr)	8.9	-0.7%	-10.0%	0.0%	-16.8%
Birla Balance (Growth)	11.6	-1.9%	-11.4%	0.0%	23.3%
Alliance 1995 Fund (Gr)	54.2	-2.3%	-11.9%	82.3%	41.5%
Tata Balanced Fund	14.4	-6.7%	-12.9%	37.8%	15.6%
Canganga	10.5	-5.8%	-13.2%	3.7%	2.3%
Dhanavikas (1)	8.0	-5.4%	-13.9%	-11.3%	-3.0%
Sun F&C Balanced Fund (Growth)	8.3	-4.5%	-14.6%	0.0%	-21.3%
JM Balanced Fund (Gr)	15.9	-6.5%	-14.8%	21.6%	10.1%
Cantriple	18.7	-5.4%	-15.2%	8.2%	5.0%

While negative returns in itself is not such a bad thing, what must be considered is that these Balanced schemes have performed more or less in line with Growth schemes over 1 month (see table below), which is definitely a bad thing. Because there are a lot of investors, who chose Balanced schemes over Growth schemes, believing them to be safer.

Open-ended Growth Schemes	NAV(Rs)	1-week	1-month	12-months	Since incep
Magnum Sector Funds - Contra	8.2	-3.2%	-4.2%	0.0%	-18.8%
Templeton Growth Fund	12.3	1.9%	-5.4%	50.5%	9.2%
Zurich India Quantum Growth	11.8	-0.8%	-6.4%	0.0%	3.7%
GIC D'MAT	8.2	-2.6%	-7.6%	0.0%	-28.7%
Alliance Basic Ind. Fund (Gr)	8.0	-3.0%	-7.7%	0.0%	-10.1%
Mastershare Plus 1991	20.7	-2.7%	-9.0%	-5.9%	4.4%
Mastergain 1992	10.8	-2.2%	-9.1%	-2.7%	2.7%
UGS 10000	11.3	-4.8%	-9.7%	-6.0%	8.9%
GIC Fortune 1994	6.18	-3.0%	-10.2%	-3.7%	-7.8%
Kothari Pioneer Bluechip (Gr)	22.4	0.8%	-10.5%	65.1%	30.9%
Birla MNC Fund (Growth)	29.3	-1.3%	-11.1%	93.6%	21.3%
Zurich India Equity (Gr)	20.0	-2.7%	-11.1%	57.4%	15.0%
UTI Sector Fund - Service Sector	28.4	-13.0%	-11.9%	0.0%	15.2%
Zurich India Top 200	15.5	-2.1%	-13.0%	7.4%	185.2%
Reliance Vision Fund	18.9	-5.7%	-13.1%	29.0%	9.9%
Kothari Pioneer Prima Plus (Gr)	23.3	-0.6%	-13.4%	64.4%	19.2%
K 30	19.0	-2.8%	-14.5%	53.7%	18.4%
GIC Growth Plus II	17.04	-3.5%	-15.5%	84.8%	18.4%
Tata Pure Equity Fund	12.5	-10.1%	-15.7%	59.4%	54.2%
Birla Advantage Fund	41.1	-4.6%	-16.1%	103.1%	10.7%
Boinanza Exclusive Growth	6.52	-9.7%	-16.2%	-10.4%	38.0%
Sun F & C Value Fund (Gr)	21.2	-6.7%	-16.8%	27.7%	11.6%
Sundaram Growth Fund	13.4	-6.3%	-16.9%	33.6%	-5.7%
Mastergrowth Unit Scheme 1993	16.1	-9.2%	-17.1%	1.7%	34.9%
Canbonus	9.4	-6.1%	-17.1%	-13.4%	24.2%

So are Balanced schemes really safe? Well, they could have been a lot more safe, if funds had cut down exposure to TMT (technology, media telecom) stocks and increased exposure to fixed income instruments (gilts, money market instruments) to lend some stability to their portfolios. While a 70:30, 65:35 ratio (in favour of equities) works fine in a rising market, maybe a 60:40, 55:45 ratio is more prudent in times of volatility. So investors looking for stability in the Balanced schemes must look for higher allocations to fixed income securities and lower allocations to TMT sectors.

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