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Swimming With the Tide

This is the top performing floating rate fund of the year - up 3.26 per cent in the first eight months of 2004. Thus, in the current scenario when floaters seem to be the flavour of the season, this fund is stamping its authority.

In the year since JM Floater's launch, the fund has managed to perform reasonably well in volatile market conditions. Consider this, in the past seven months, the fund has consistently beaten its category. Moreover, abiding by its objective of protecting investors' capital, the fund's best and worst return in any 30-day period has stood at 0.56 per cent and 0.36 per cent, respectively.

Not only that, the fund's year-to-date return of 3.26 per cent as on August 30, 2004 lands in the top of the category. The fund has achieved this superlative performance on the back of a high quality portfolio. On an average, nearly 37 per cent of its assets are spread over P1+ instruments and 7 per cent in AAA rated corporate bonds. The exposure to low rated bonds (below AAA rated) has been remained below 10 per cent of the portfolio. Floating rate bonds have account for an average 22 per cent of the portfolio.

Cash and bank deposits have always formed a major chunk of the fund's portfolio. Hence, till May 2004, the fund's average maturity never crossed 73 days. But in June, the fund has taken exposure to some high duration bonds resulting in a sharp rise in its average maturity to 164 days.

Apart from generating stable returns, the fund's low expense ratio of 0.65 per cent is an added plus. Therefore, in the current scenario when the floating rate funds seem to be the flavour of the season, this fund too is stamping its authority.