Franklin India Balanced Fund: A quiet, consistent performer

In this post, I discuss two quiet, consistent performers in the equity-oriented  (or “balanced”) mutual fund space: Franklin India Balanced Fund and Canara Robeco Balance Fund.  Let us begin with some definitions: (1) consistent performer: A fund that has consistently outperformed a chosen benchmark over the period studied (in this case, every possible 3Y, 5Y and 7Y period from April 2006) both in terms of risk and downside protection.

(2) downside protection: Whenever the benchmark registers a loss (negative monthly return), the fund should have registered a lower loss (eg. benchmark monthly return = -5%, fund monthly return = -4%). Read more: An introduction to Downside and Upside Capture Ratios

(3) quiet: The fund has a low AUM and there is practically no social chatter about it. ( Don’t worry, this post will not change anything. I have supreme confidence about my insignificance).

How to screen for quiet consistent performers

Step 1: Follow (ahem)

Step 2: Watch out for the month mutual fund screeners. The latest is here: Nov 2017 Freefincal Equity Mutual Fund Outperformance Screener

Step 3: Download the file and filter out a particular category (if that is what you want)

Step 4: There are many ways to screen, and for this post, I have chosen balanced funds and listed only those funds that have beat the BSE Balanced Benchmark more than 90% of every possible 3Y, 5Y and 7Y periods from Apr. 2006.

BSE Balanced Index

This my own creation when I wanted an accessible benchmark for balanced mutual fund. Most balanced funds use CRISIL Balanced Index

This costs about 11 lakh a year (yeah, you read that right!) and has

Nifty 50 index – 65% +

CRISIL Composite Bond Fund Index – 35%

The CRISIL Composite Bond Fund Index itself consists of

  1. CRISIL Gilt Index 50%
  2. CRISIL AAA Long Term Bond Index 20%
  3. CRISIL AAA Medium Term Bond Index 12%
  4. CRISIL AAA Short Term Bond Index 6%
  5. CRISIL AA Long Term Bond Index 5%
  6. CRISIL AA Medium Term Bond Index 3%
  7. CRISIL AA Short Term Bond Index 4%

So instead of this, I use (more due to necessity, than superiority) BSE Balanced =

70% of S&P BSE AllCap Index (total returns index) +

30% of S&P BSE  India Bond Index. (rebalanced daily – a bit of an overkill!)

As mentioned in the above post, this is a reasonably tough index for the Balanced fund to beat.

Value Research uses VR Balanced which is a weighted sum of all funds in the category. In this post, I show that BSE Balanced is a tougher index to beat than VR balanced: Using Balanced Mutual Funds As The Core Equity Portfolio Holding

Back to step 4:

A table showing balanced mutual funds in India and their consistent performance

Let me explain one entry for clarity

Take Canara Robeco Balance and the first table (3 years)

1786 3 year rolling returns were compared with BSE balanced. Out of this, the fund had higher return for 1782 entries = 99.78% outperformance ratio.

If monthly returns were considered over those 3Y periods, the fund typically fell less than BSE Balanced 87.64% of the periods sampled.

The exact definition of downside capture consistency

= no of times downside capture < 100%/(total no of downside capture points)

The downside capture is a measure of loss protection. For example, a downside capture of 80% over 3 years implies that the fund has only captured 80% of the benchmark losses when the benchmark monthly returns were negative. Lower the downside capture, the better.

Step 5: head back to the table and look at the entries.

HDFC Prudence, Balanced, Tata Balanced and Birla Balanced are reasonably well known (wrt AUM). Tata has the lowest AUM among these. Has its popularity waned a bit?

Franklin Balanced and Canara Robeco Balance have an impressive record but are not so well known. The purpose of this post is to introduce them to readers who may not be aware and also discuss a method of evaluating funds (for selection).

Birla Sun Life Balanced ’95 Fund has the lowest downside protection, but impressive return-outperformance. Nothing wrong with it, other the fact its 7Y downside protection is not so high.

Surprise, surprise! HDFC Prudence has better downside capture consistently than HDFC Balanced (for the duration considered). So think don’t be in a hurry to exit HDFC Balanced if  HDFC merges it with HDFC Prudence to comply with SEBI’s Mutual Fund Scheme Categorization: Pros and Cons.

Note: this is one of many ways to analyse funds. Each result could be different – blind men touching the mutual fund!

Step 6:  Explore more about Franklin Balanced and Canara Robeco Balance. Read their scheme information documents (SID) or the Key Information Memorandum (KIM) to know more about how they will invest and where they will invest. This post is merely the tip of the iceberg.

Remember, lazy people should either outsource management or stay away. DIY is a synonym for effort.


You Can Be Rich Too with Goal-Based Investing, my first book is now available at a 35% discount for Rs. 258. It comes with nine online calculators. Get it now. Order the Hindi version via this link

Gamechanger, my second book is now only Rs 149 (25% off).  Get it or gift it to a young earner 

The ultimate guide to travel by Pranav Surya is a deep dive analysis into vacation planning, finding cheap flights, budget accommodation, what to do when travelling, how travelling slowly is better financially and psychologically with links to the web pages and hand-holding at every step.  Get the pdf for ₹199 (instant download)

Use this form to ask Questions or reg. the robo template ONLY (For comments/opinions, use the form at the bottom)

And I will respond to them in the next few days. I welcome tough questions. Please do not ask for investment advice. Before asking, please search the site if the issue has already been discussed. Thank you.  PLEASE DO NOT POST COMMENTS WITH THIS FORM it is for questions only.

[contact-form][contact-field label=”Name” type=”name” required=”1″][contact-field label=”Email” type=”email” required=”1″][contact-field label=”Ask your question (Got an opinion or comment, use comment box at the bottom of the page. DO NOT post them here)” type=”textarea” required=”1″][/contact-form]

Want to conduct a sales-free "basics of money management" session in your office?
I conduct free seminars to employees or societies. Only the very basics and getting-started steps are discussed (no scary math):For example: How to define financial goals, how to save tax with a clear goal in mind; How to use a credit card for maximum benefit; When to buy a house; How to start investing; where to invest; how to invest for and after retirement etc. depending on the audience. If you are interested, you can contact me: freefincal [at] Gmail [dot] com. I can do the talk via conferencing software, so there is no cost for your company. If you want me to travel, you need to cover my airfare (I live in Chennai)

Connect with us on social media

Do check out my books

You Can Be Rich Too with Goal-Based InvestingYou can be rich too with goal based investing

My first book is meant to help you ask the right questions, seek the right answers and since it comes with nine online calculators, you can also create customg solutions for your lifestye!Get it now.  It is also available in Kindle format.

Gamechanger: Forget Startups, Join Corporate & Still Live the Rich Life You Want

Gamechanger: Forget Start-ups, Join Corporate and Still Live the Rich Life you want My second book is meant for young earners to get their basics right from day one! It will also help you travel to exotic places at low cost! Get it or gift it to a youngearner

The ultimate guide to travel by Pranav Surya

Travel-Training-Kit-Cover This is a deep dive analysis into vacation planning, finding cheap flights, budget accommodation, what to do when travelling, how travelling slowly is better financially and psychologically with links to the web pages and hand-holding at every step.  Get the pdf for ₹199 (instant download)

Create a "from start to finish" financial plan with this free robo advisory software template

Free Apps for your Android Phone

All calculators from our book, “You can be Rich Too” are now available on Google Play!
Install Financial Freedom App! (Google Play Store)
Install Freefincal Retirement Planner App! (Google Play Store)
Find out if you have enough to say "FU" to your employer (Google Play Store)

About Freefincal

Freefincal has open-source, comprehensive Excel spreadsheets, tools, analysis and unbiased, conflict of interest-free commentary on different aspects of personal finance and investing. If you find the content useful, please consider supporting us by (1) sharing our articles and (2) disabling ad-blockers for our site if you are using one. We do not accept sponsored posts, links or guest posts request from content writers and agencies.

Blog Comment Policy

Your thoughts are vital to the health of this blog and are the driving force behind the analysis and calculators that you see here. We welcome criticism and differing opinions. I will do my very best to respond to all comments asap. Please do not include hyperlinks or email ids in the comment body. Such comments will be moderated and I reserve the right to delete the entire comment or remove the links before approving them.

10 thoughts on “Franklin India Balanced Fund: A quiet, consistent performer

  1. The fund has a low AUM and there is practically no social chatter about it. ( Don’t worry, this post will not change anything. I have supreme confidence about my insignificance).

    With so many followers of your blog and calculators, definitely you will make an impact on the followers… We are with you Pattu…

    Vaazhga valamudan…

  2. I have been reading ur posts on FB and also ur site. In this post, I was expecting to see more on performance of Franklin India Balanced Fund. However, I felt that after the initial paragraphs on the fund, you moved to a general analysis of all funds (so missed ur detailed analysis of the fund).

    1. Yes, and it is deliberate. The nos (which I think are important) are there on the table for the reader to see and make their conclusions.

  3. Thanks Pattu.
    This is good stuff! And the surprise was really a surprise !! 🙂

    I have both HDFC Pru and HDFC Bal, but as the corpus in both of them grew, the HDFC-Pru became too much of a challenge with its 100 or so odd stocks and volatility (relative to others in my portfolio).
    Finally, in search of a better ‘quality’ portfolio with lower volatility, I ended up transferring to HDFC-Bal.
    Doesn’t look I reasoned right 🙁 🙂

    And life goes on…

  4. Hello sir,

    But having gone through the past returns of Franklin Balanced fund, they seem to be average. Though i appreciate your insights into their downside protection & upside capture %. But the funds’s absolute returns is far below compared to its peers for 3 / 5 year returns. Whats you take on that ?

Comments are closed.