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Grindlays Super Saver Income

The fund has a brief history, as it has not been through a full market cycle. But it holds promise, stemming from a consistent relative superior performance and high stability.

Grindlays Super Saver Income Fund (GSSI), a no-load medium-term bond fund seeks steady returns from a portfolio of quality debt instruments.

With a relative superior performance coupled with successive rate cuts in 2001, the fund has delivered a handsome total return of 16.01 per cent since its launch in July 2000 through January 31, 2001. In a brief period, Grindlays Super Saver Income Fund has emerged as the flagship of the relatively new entrant Standard Chartered Mutual Fund with net assets of over Rs 1800 crore in just about one and half years.

The fund is guided by a process styled as "3D Factor Process", which takes into account the key factors that drive interest rates i.e. economic fundamentals, market psychology and market valuations. This process contributes in determining the portfolio duration of the fund.

Besides being a beneficiary of the falling rate regime since its launch, the fund has maintained a reasonable balance in its fixed income portfolio. The top rated corporate bonds have accounted for an average 49 per cent, while allocation to government securities averaged around 34 per cent. The fund largely kept away from low rated corporate debt with an average allocation of 8 per cent in AA and below rated bonds, but currently accounts for as much as 11 per cent of the portfolio. And its above average performance looks all the more impressive, as it has been achieved without wild swings in portfolio duration, which has been maintained around just over 4 years.

In its life, Grindlays Super Saver Income Fund has witnessed greater stability with sustained asset base and new money pouring into the fund every month. However, on special situations of uncertainty in recent past, the fund suffered huge redemption. The vulnerability in uncertain times and perhaps on account of being a no-load bond was visible in September 2001. During the month, the asset base shrunk by almost a third with a net decline of Rs. 606 crore. And the fund also suffered a loss, which was twice as much of the average peer.

Grindlays Super Saver Income Fund has a brief history, as it has not been through a full market cycle. But it holds promise, stemming from a consistent relative superior performance and high stability.