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Grindlays Super Saver Income Fund

Its early days for the lucky fund, whose launch coincided with a sharp fall in interest rates

Grindlays Super Saver Income Fund was the maiden fund from Standard Chartered Asset Management Company. Launched in July 2000, the scheme seeks to generate stable long-term returns with investments in top rated fixed income instruments. The fund manager follows a 3-D process to track interest rate movements - economic fundamentals, market psychology and market valuation. The fund has given dividends under each of the three options - quarterly, half-yearly and yearly plans.

Grindlays Super Saver (GSSIF) has been a scorcher since launch with an aggressive investment strategy and dexterous management. Launched around the same time as HDFC Income , the fund was also bestowed with an impressive mobilisation of Rs 258 crore amidst a bearish market. Starting off with a sizeable cash component to take advantage of high call rates, the fund quickly shifted gears as sentiment improved and bonds started to move up. The fund stretched its maturity profile with allocation to sovereign bonds though it restricted investments to medium-term gilts. Bond prices move up with falling interest rates with higher gains for longer dated papers. Further, the fund has been a stickler for quality, maintaining an average 96% exposure to AAA bonds despite a spurt in corpus. Investment in top rated bonds takes care of the twin problems of credit quality and liquidity.

In its brief history, GSSIF has raced ahead of its peers with a six-month simple return of 9.23% while the category of medium-term debt funds has returned an average 8.03%. While the annual expenses for GSSIF have been in excess of 2%, the benefits of a burgeoning corpus are expected to accrue in the current year. Yet, its early days for the fund, whose launch coincided with a sharp fall in interest rates. Further, the fund manager's skills are yet to be tested in troubled waters.