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A Decent Offering

This fund has given returns in line with the category average but with slightly lower volatility. The fund's portfolio is also spread over quality issues, thus keeping investors in good stead here.

India's oldest cash fund has never disappointed its investors. It keeps its average maturity close to 60-100 days -- in line with the category average. With this, the fund withstood the volatile first quarter of 2004 with ease. Over the years, expenses have decline consistently. From a high of 1.54 per cent in March 1999, the fund's expense ratio has come down to 0.68 per cent in March 2004 – same as the category average.

In the past one-year, nearly 60 per cent of the fund's portfolio has been invested in commercial papers. AAA-rated bonds just account for 10 per cent of the portfolio. However, This wasn't always the case. Till October 2001, AAA bonds accounted for a quarter of the fund's portfolio. And the fund's stake in mid-quality bonds (below AAA rated) was nearly 20 per cent between February 2002 and September 2002. But it has come down to below 10 per cent now.

However, to improve portfolio yield, the fund manger is keen on looking at good quality unrated/AA/AA+ short-term paper, while ensuring that at least 80 per cent of the portfolio is invested in AAA/P1+/call money/repo at all time.