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An Appealing Pick

ICICI Prudential Short-term Institutional has turned in an average performer. But you can still consider it…

From a consistent top quartile performance in the first five years of its existence, it has morphed into an average performer. Yet, a lower-than-average expense, good quality portfolio and impressive long-term performance are appealing. The fund is the third best in its category over the five-year period ended May 31, 2012. It has outperformed its category in 70 per cent of the quarters.

Historically, it has tackled the interest rate changes to the advantage of its investors. In 2006 and 2007, it turned into an ultra short-term fund by bringing down its average maturity to less than one year. It outperformed that category both the years. In 2008, with the swift downward journey of the 10-year benchmark yield, the fund's portfolio maturity averaged around 4.58 years in the last three months and it delivered 10.35 per cent return in this quarter (category average: 4.19%). This year, the fund has moved up the average maturity to over two years. Though debentures have dominated the portfolio, there have been significant positions in Certificates of Deposit and GOI securities.