The fund's good performance can be judged from the fact that in the past one year, it has bettered the category average returns in seven of the 12 months. More importantly, its best and worst return over any one month period has been 0.48 per cent and 0.35 per cent respectively, denoting that the fund has been successful in preserving capital. Also, the fund has the second lowest expense ratio in the category (0.56 per cent) thus is efficient at transferring the returns it generates to its investors.
In the first half of this year, its portfolio on an average has consisted of almost 20 per cent in AAA rated bonds, 21 per cent in P1+ rated commercial papers and the rest in term-deposits and money market instruments. This goes to show that the fund's overall holdings are of a very high quality. Currently, the fund has only 27 per cent of its holdings in floating-rate instruments. The fund's average maturity has ranged between 0.52 to 0.81 years. This perhaps is an indication of the short maturity of its holdings.
As floating rate funds gain popularity among debt fund investors, this fund is sure to grow and if its track record is anything to go by, cautious investors amidst all the chaos of rising interest rates could find a safe heaven here.
This article was originally published on September 10, 2004.
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