The first quartile performance of the fund over the past two years has shoved it in the limelight. The reason could probably lie in taming down its aggressive approach. The fund was much more aggressive in its earlier days with the average maturity tending to move on the higher side, going as high 19.40 years (February 2008). Allocation to government securities went up to 91 per cent in December 2009. The fund paid the price in terms of performance.
Since 2010, majority of portfolio is invested in market instruments like Certificates of Deposit and Commercial Paper. As a result, the average maturity of the fund’s portfolio has largely remained below one year, though last year on four occasions it crossed that mark.
From a low of `1.53 crore in 2010, the assets of the fund have increased. Conversely, as assets have grown, the expense ratio has risen from a low of 0.39 per cent in September 2010. Given the recent track record, this fund is worth a second look.
This article was originally published on March 29, 2012.
Ask Value Research 
New episodes every Friday 
New Process Alert 
Seems like you've uploaded a wrong QR code. Please upload the QR code downloaded from MF Central platform.
