It's one of the most consistent picks in the category. Barring 2008, when it slipped to the third quartile, the fund has always been a top quartile performer in its history of around six years. Not surprisingly, it's the top performer over the three and five year period (May 31, 2012).
The fund owes much of its long-term success to the yield provided by mid-quality corporate bonds. The average credit quality of the portfolio is in the range of AA. Very conservative investors would not view this well. In fact, as on April 30, 2012, the fund had 45 per cent of its assets invested in AA and below rated paper. Though it's comforting to note that more than half the portfolio was in AAA rated paper.
Its long-term performance and approach to capitalise on high yielding corporate bonds makes it a good choice. The fund is the largest short-term debt fund accounting for over 25 per cent of the money invested in the category. Ironically, the fund's expense ratio has risen along with its growing asset base and is marginally on the higher side.