Another standout feature of the fund has been the fact that it has stuck to its objective of investing primarily in floating rate instruments. In the first six months of this year, an average 60 per cent of its portfolio has been invested in floating rate instruments. Another 21 per cent has been in cash and cash equivalent investments like repos and call money. The rest of the portfolio has comprised of short-term debt - including debentures, G-secs, T-bills and privately placed debt.
Moreover, the funds holdings are of a high quality and have an average credit rating of AAA. This it has primarily achieved by investing in short-maturity instruments, where the default risk is very low. As a result, the average maturity of its holdings has hovered around 75 days.
The fund, undoubtedly, has been one of the flag-bearers of this category, performing well on the twin objectives of capital preservation and managing interest rate volatility. Investors should give this fund a look-in when thinking of investing in floating rate funds.