This balanced fund is a consistent performer but not a spectacular one. It has retained a four-star rating for most of the period since inception, slipping up a bit in the last one year. The fund has a 75-25 equity-debt allocation, with its equity exposure consistently above 70 per cent. Large-cap stocks usually make up 60 to 70 per cent of the exposure, but the proportion has been pegged up sharply to over 84 per cent lately. The fund is now quite overweight on large-caps compared to its peers.
Tata Hybrid Equity Fund follows a growth at reasonable price (GARP) style of investing. It believes in buying businesses with good earnings growth prospects over the medium term, which are run by quality managements. Each sector is played through a basket of five to eight companies. The top holdings are capped at 4 to 5 per cent to reduce concentration and to capture more opportunities. The debt portion has allocations mainly to G-secs and AAA rated paper. The average maturity stood at about five years in January 2018.
Tata Hybrid Equity Fund has sharply lagged behind both benchmark and peers in the last one year. While three-year returns are now behind the benchmark and category by about 2 percentage points, the five-year returns just about match the category. The fund didn't fare well in the bear market of 2008, but it navigated 2011 quite well. The 10-year return of 16 per cent compares well even to pure equity funds.
Tata Hybrid Equity Fund - that navigates all kinds of markets well and delivers with high predictability.
Tata Hybrid Equity Fund was earlier called Tata Balanced Fund.
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