A balanced fund that believes in making the most of bull markets, it has retained a rating of four to five stars consistently for the last six years. It maintains a steady-state asset allocation between equity and debt, with equity staying in a narrow band of 68 to 72 per cent.

The fund avoids both cash calls and drastic changes in allocation with market swings. The aim is to purchase reasonable quality businesses, with the ability to deliver growth and having good ROE, management quality and business dynamics, at sensible valuations. The debt part is managed using a blend of duration and accrual strategies.

Like peers, the fund did carry a high portfolio maturity of over 10 years in 2016 but has pruned it to five years in recent months. It also uses corporate bonds rated AA or above to build accruals.

HDFC Balanced Fund three and five-year returns are 4 to 7 percentage points ahead of the benchmark and 2 to 3 percentage points better than the category returns. The fund's mid and small-cap tilt is likely to have helped performance in this phase. But the fund has toned down its mid-cap allocations lately. From more than half of the equity portion, mid and small-cap exposure fell to about 32 per cent by January 2018.

HDFC Balanced Fund 10-year record is quite comparable to pure equity funds. Despite its aggression, the fund has contained downside well in the bear markets of 2011 and 2008 relative to its peers.

HDFC Balanced Fund delivers big pay-offs relative to risks taken.