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Birla Gilt-Long term

The fund has given a solid 17.82% total return since launch. This may be a pass, but it still holds promise as a long-term fixed income investment, highest safety and clear portfolio strategy.

Birla Gilt Plus seeks income and capital appreciation from a portfolio of government securities. The fund states its suitability for a 3-year investment horizon. With an aggressive management, the fund has delivered an above average total return of 17.82% since its launch. However, high return was achieved with a higher intermittent volatility.

Nearly all medium and long-term government bond fund have posted strong gains over the last year. Understandably so, as bonds with longer-than-average maturity tend to outperform their peers when interest rates fall and under-perform when rates rise. And Birla Gilt Long-term Plan has raced ahead in the pack, with its aggressive duration bets. For instance, in April '01 on a favorable credit policy, the fund quickly stretched its maturity from 5.54 years in March to 8.3 years. And with anticipated interest rate cut not coming through till July, it again reduced the portfolio maturity to 4.95 years in July. Again, during volatile June-July 2000, the fund maintained a short-maturity to limit the losses to 0.20 percent against the category loss of 0.33 percent. In September 2001, the most turbulent month for bonds, the fund held ground. However, the funds big moves on duration with and a concentrated holding lend more risk to the portfolio.

The fund is well suited for as a long-term fixed income investment, highest safety and clear portfolio strategy.