Over the past 5 years, this fund has made its mark. Having said that, the last two years have been extremely volatile. It stood at the bottom of the rankings in 2008 (55 out of 59) with a return of -11.51 per cent (category average: -3.42%). The very next year it stood vindicated by grabbing the No. 2 slot. Historically, the fund has been aggressive in equities. Though its mandate puts a cap at 25 per cent, in September and October 2007, the equity allocation touched 31 per cent. By December it was at 29 per cent (category average: 20%), that too with a very high mid-cap tilt. With the bulls galloping at that time, the fund delivered impressively that year. However, under the new management and investment team, the equity portfolio is more diversified and single stock allocation rarely crosses 3 per cent.
On the debt side, the fund is conservative with the average portfolio maturity always on the lower side. Prior to mid-2006, the fund used to take higher maturity bets but that has not been the case since. The portfolio maturity has not gone above a year (barring April 2010), a significant change from its earlier days when it actually touched 10 years (July 2005).
The fund largely invests in Treasury Bills (T-Bills) and call money. Only after fund manager Chandan joined in September 2008 were Certificates of Deposit (CDs) added to the portfolio. And last year, Commercial Paper (CP) made a re-appearance since 2005 while exposure to debentures also resumed. With a low average maturity, G-Secs have not found a place here since mid-2006.
Frequency of dividend payouts is its forte. Prior to 2008, it bypassed the monthly dividend route and instead paid a high dividend generally twice a year. For instance, in 2007, it paid a dividend of 5.45 per cent each in May and December. In 2008 it performed abysmally and offering a dividend was not possible. However, that year there were changes in the investment team due to Robeco taking a stake in Canbank Mutual Fund. So the past pattern of dividend payments need not be indicative of the future. Since October 2009, the fund has been paying a dividend of 0.88 per cent regularly.
Although the expense ratio has been brought down to 2.16 per cent from 2.50 per cent (February 2010), it is still much higher than the category average of 1.72 per cent.
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