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Moderate Aggression

Don't expect this one to rake in high returns; it is a moderate fund and will provide relatively risk free average returns. The fund's 15% limit on equity investments makes it safe, but moderately so

Risk averse investors are likely to be happy with the fund's performance - provided they have realistic expectations. With a 15 per cent limit on its equity exposure; the fund's returns clearly lack the wow factor of its more aggressive peers, but on the flipside, it offers the comfort of less volatile returns. However, given the moderate risk profile, we would've expected the fund to put up a better show in protecting the downside risk.

The current portfolio characteristics look like this: The equity portfolio is characterized by active trading, with a bias towards large-cap stocks.

On the debt side the fund offers access to a broad range of instruments where allocations are churned continuously. Swapping a large corporate debt portfolio for government securities or even term deposits is done frequently enough.

The fund also takes aggressive duration bets, moving from short-term paper to dated securities with alacrity.

The net result is that we have a fund that in one month displays high sensitivity to interest rate changes and in another month displays a risk averse portfolio. So if you intend basing your fund selection on the fund's debt strategy then be aware that there is no consistency here. The only objective is to chase the best yield.

With a clear preference for government securities and high maturity of holdings; the fund is clearly betting on a possible reduction in the central bank's key lending rates. It remains to be seen whether the fund maintains this till the January 2008 credit policy review, where a downward revision of interest rates is possible.

The fund is conducive for those looking at a moderately aggressive offering with consistent dividend payouts. You can expect above average returns but don't count on the fund to deliver chart busting returns.