The fund got off to a perfect start. In its very first month of performance (December 2008), it delivered 14.57 per cent (category average: 8.23%). The fund manager took an aggressive bet with the average maturity of the portfolio being 22.47 years while the category average was 8.15 years. Unfortunately, 2009 did not prove to be a good year for the fund. The aggressive stance did not pay off in the first quarter of the year and again in the September quarter. Since then the fund has adopted a more subdued approach. Ever since August 2009, the fund's average maturity has never exceeded two years and has gone as low as 0.02 years. The past two years have been good for the fund and it has delivered above average returns. In fact, after the 2009 debacle, it was a top quartile performer in 2010. Although assets of the fund have surged, the expense ratio is still on the higher side. The fund invests majority of its assets in debentures and structured obligations.
This article was originally published on March 23, 2012.
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