Are you exploring various investment avenues to build your capital with consistent returns with some downside support in adverse conditions? This is where the fund investing in combination of equity and debt or the balanced funds. One of the top performers among this category is JM Balanced Fund, which introduced in April 1995, with an objective to generate steady current income together with long term capital appreciation via investments in equities and some portion of the corpus in debt. The best feature of balanced fund is that it protects you from maximum capital erosion unlike in the case of equity oriented fund.

JM Balanced has stood firm in its objective of providing consistent returns and capital appreciation. The fund bestowed first-rate returns (annualized) of 36.58%, 35.95% and 28.86% over the last one, three and five year period respectively. The fund thereby successfully surpassed its benchmark index, Crisil Balanced, by a wide margin. The benchmark has registered annualized returns of 18.72%, 24.47% and 22.42% over the same period. The asset corpus of the fund during the year climbed by 12.52% to Rs 166.3 million.

However the returns on the fund during the last two months slipped marginally. Now the performance of the fund is improving as the market is recovering from the recent losses after the easing concern over US subprime lending crisis and political uncertainty in the country. When queried by myisis about the impact of US subprime lending crisis on Indian markets, Sandeep Neema, fund manager at JM Financial Mutual Fund said,`` It`s difficult to take a call on how deep the US subprime crisis is. As per the data available there does not seem to be a direct impact on the Indian markets; however, if the crisis deepens, it will certainly affect the sentiment and the flows towards the emerging markets including India. ``

Moving forward to fund`s investment style, the fund is keeping an eye to catch high growth stocks particularly in mid-cap space, at an appropriate time. It`s better, if we understand more about the investment philosophy and stock picking approach from fund manager. Neema said, `` we at JM Financial Mutual Fund are focused on picking stocks through fundamental research. Stocks are picked using the bottom up approach across sectors and market caps. We meet companies, their competitors and build financial and valuation models before arriving at a decision to pick up stocks in the portfolio. Our investment philosophy is to buy high growth companies and remain invested till we achieve our target price. ``

The fund has increased its exposure in equity from 57.39% in August, 2006 to 72.99% in July 2007. Debt component on the other hand constitute 27.01% of the fund`s total portfolio in July 2007. The fund is betting on construction, real estate, cement, financial and engineering stocks.



When asked about prospects of these sectors, Neema said, `` India`s growth is driven by infrastructure investments apart from consumption and outsourcing stories. Construction and engineering sectors will continue to deliver high growth driven by infrastructure investments. Financial sector will ride the huge investments taking place in this sector. We are bullish on all these sectors as we believe companies in these sectors will deliver high earnings growth over the next few years. ``

Some of the fund`s favourite stocks over the six months include India Cements, Era Constructions (India), Dabur India, Jindal Steel & Power, Reliance Capital, Alstom, Emco and Peninsula Land. There has been no change in number of stocks held in the portfolio at 23 over a period of six months. The top 5 stocks account 31.33% of the fund`s portfolio. The fund typically invests in 12 to 16 sectors.

The growth opportunities and the macro factors continue to remain attractive in India but at the same time investors should be cautious before going in for investment. ``Invest through mutual funds and stay invested for at least 12-18 months, `` said Neema.