L&T India Prudence Fund

Current market conditions are better suited for conservative funds and we think another balanced fund is in order. L&T India Prudence Fund is a good option on that count. When fund manager Lahiri (who manages the equities portion; Shriram Ramanathan looks after the debt portion) started managing the scheme in November 2012, its size was Rs25 crore. By end-April 2017, L&T India Prudence Fundwas worth Rs4,117 crore.

The scheme usually invests 69-72% in equities. The portfolio is well diversified. Lahiri has invested the fund's equity portion in banks (14.5%), construction projects (7.7%) and software (4.3%), although the share of software has been reducing. When the fund was smaller in size, Lahiri used to invest in small- and mid-cap scrips, but as the fund's size grew, he now prefers large-cap companies. "More than 60% of the portfolio is usually in large-cap scrips now," he says.

For the fixed income portion, Ramanathan sticks to an accrual strategy: investing in well-managed companies' bond to earn interest income. Ramanathan has consciously avoided following a duration strategy (increasing or reducing the portfolio's average maturity to make the most of fall or rise in interest rates) as he sees a bigger risk in it.

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