VR Logo

SBI Arbitrage Opportunities

The largest player but pretty much average

Though it boasts of the largest asset base, its performance is just about average. Launched in October 2006, it was the best performing fund in the category in its first quarter (January-March 2007) with returns of 2.83 per cent. But the fund's two-year return (March 31, 2009) of 7.96 per cent is below the category by a small margin of 26 basis points.

The fund manager moves in and out of sectors frequently and does not hesitate in taking concentrated sector bets. Financial services, for instance, had an allocation of 31.50 per cent in August 2007 which dropped to 19.88 per cent the very next month. Between January and February 2008, the allocation rose from 7 per cent to 20.42 per cent. Ditto in energy where the allocation moved up from 12.64 per cent (November 2007) to 24.44 per cent (December 2007) and down to 17.25 (January 2008) and back to 12.74 per cent (February 2008).

Although the fund's mandate limits its debt investment to 35 per cent, in the months of September and October 2008 the average allocation to debt stood at 63.39 per cent.