In a category where expenses mean a lot, Reliance Mutual Fund is running Reliance Liquid Treasury with remarkable economy
21-Jul-2005 •Research Desk
The fund charges just 0.18 per cent, while its average peer cost 0.62 per cent. This makes the fund the most economical member of the category.
However, the expense ratio has not been so low in the past. The fund deserves praise for bringing it down from a high of 1 per cent in March 2002 to this level.
Reliance Liquid Treasury is also one of the aggressive funds in the category-since April 2003, the average maturity has rarely dropped below 100 days. Since February last year, the fund has kept maturity between 100 and 180 days, thus taking higher interest rate risk. However, the returns have not justified this risk-it has only been able to match the category average in the past one year.
The fund's initial portfolios were dominated by cash and money market instruments. Now, the focus has shifted to P1+ papers-at April 2005 end, they accounted for 54 per cent of the assets with another 17.21 per cent invested in AAA papers. One of the largest funds in the category, Reliance Liquid Treasury looks very attractive for its low expense ratio and a quality portfolio.
