Commensurate with a s strategy that lays emphasis on safety and liquidity, DSPML Liquidity offers a steady cruise
29-Jun-2001 •Research Desk
In line with a s strategy that lays emphasis on safety and liquidity, DSPML Liquidity offers a steady cruise. Investors can participate in the scheme with minimum investments of Rs 25,000 at NAV. However, redemption within four days faces a load of 0.25%.
The scheme seeks reasonable return commensurate with low risk and high levels of liquidity. It seeks to achieve this with approximately 80 % of the corpus invested in money market instruments, with the balance allocated to debt instruments. Thus, the fund has largely parked its small sized corpus in money market instruments (at an average 70%). These instruments offer returns in line with the prevailing short-term liquidity conditions and thus perform in line with the market.
Bonds are however susceptible to interest rate changes, gaining value with a rate cut and moving down with a rise in interest rates. The fund has sought to capture appreciation with fall in interest rates through investments in AAA rated corporate instruments, residual gilts and treasury bills. Under normal circumstances, these instruments account for 15% of the corpus. However, in the current bullish markets, the fund has sought an exception to invest 70% of its assets in these instruments. Nevertheless, the fund has stayed with in limits of prudence, by holding the maturity close to 2 months.
Perusing a largely conservative yet active strategy, the fund has delivered a return of 8.5494% in the last one year against a category average of 9.2645%. If you want your cash fund to deliver safety, liquidity and return, in that order, consider DSPML Liquidity.
