Grindlays Super Saver Income opened account being conservative on credit quality, while actively managing the interest rate risk. The fund has paid a dividend of 6% under its annual dividend option.
Grindlays Super Saver Income, the first scheme from Grindlays Mutual Fund, aims to create a blue chip portfolio while offering above average returns with below median risk. Towards this end the fund emphasizes on active duration management. Aided by its 3D strategy, which monitors economic fundamentals, market philosophy and market valuation, the fund determines its composition and duration of the portfolio.
In line with this philosophy, the fund has invested its steadily growing corpus in quality AAA rated instruments, which have averaged at 96.5% of the corpus in the last six months. Besides offering quality, these instruments provide liquidity in order to re-align portfolio or meet redemption pressure. Of this the fund held an average 35% exposure in sovereign bonds while the rest is invested in corporate debt.
While being conservative on the credit quality, the fund has chosen to actively manage interest rate risk. Bond prices fluctuate in response to interest rate outlook. They gain when interest rates move down and lose value when rates move up. Amid tightening of interest rates, the fund started off with a conservative maturity profile in July 2000. However, with the markets upbeat since October, the fund increased it portfolio maturity to participate in the rally.
With a quality portfolio and active interest risk management, the fund has posted a simple return of 10.70 % in its debut year. While the fund is too young to be evaluated, the fund seems to have started off on a right note in managing its fast growing corpus.