I intend to invest in debt funds. Currently I have two SIPs running in DSPBR Balanced and Kotak 30, each for an amount of Rs 3,000. To bring in the debt component to my portfolio, I shortlisted Canara Robeco Income Fund (G). But when I had a look at the fund's portfolio, more than 50 per cent was held in cash/call. However, the fund's returns have been consistent since inception. How should I read the performance of this fund? Please suggest?
-Abhishek
The word 'consistency' does not come across on looking at the annual performance of Canara Robeco Income Fund (G) over the past five years. Its history is mingled with periods of impressive results in 2004 and 2005, and dismal performances in 2003, 2006 and 2007. But ever since February 2008, the fund has been ahead of its peers. The new fund manager is doing a great job, with smart bets towards the interest rate outlook. The allocation of 50 per cent in cash/call money had actually helped the fund with handsome monthly returns of 4.44 per cent (category average: 0.76%).
This article was originally published on December 15, 2008.
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