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New And Doing Well

Deutsche Short Maturity does not mind taking slightly higher risk to deliver above-average returns. A relatively new fund in the category, it has done well in terms of delivering stable returns

Deutsche Short Maturity does not mind taking slightly higher risk to deliver above-average returns. A relatively new fund in the category, it has done well in terms of delivering stable returns. The fund has outperformed its category average in 14 of the 20 months for which it has existed. Also, its expense ratio of 0.9 per cent is almost in the same range as that of the average peer's.

In the past six months, the fund has opted mostly for AAA-rated bonds, which have had an average allocation of 65 per cent. However, it has also not avoided low rated bonds--the exposure to below AAA-rated bonds had been in the range of 11-21 per cent. The fund's average maturity has remained in the higher band of 15-23 months. That's because its allocation to gilts had been on the higher side in the category ranging up to 18 per cent of its net assets.

This higher maturity has also translated into higher volatility. Hence, there is wide variation in the fund's best and worst returns (best one-month return is 0.51 per cent, while the worst one-month return is negative 2.13 per cent). Despite all these, Deutsche Short Maturity fund had managed to beat its peers quite comfortably. The one-year return of 4.3 per cent places it among the top half of the category.