It has been managed to its original plan - to strike a balance between yield, safety and liquidity. In the process Zurich India High Interest has emerged an average performer.
By aligning a predominant part of its investments in the safe AAA quality rated instruments - the fund has chosen safety over return in the process. Of course, this focus on quality has come about after having focused on high return orientation with substantial investments in AA and lower rated debt instruments. Besides lower chances of default, AAA quality instruments with their active trading in the shallow debt markets offer liquidity. While AAA rated instruments account for a average 90% of the corpus - the fund has chosen to juggle across instruments actively, preferring gilts in recent times.
With liquid gilt instruments available in varying maturities the fund holds the flexibility to alter the portfolio maturity actively. This becomes critical in case of a bond fund, for bond prices, particularly longer dated papers being more susceptible to changes in the interest rate outlook. While not being aggressive with its portfolio maturity its gilt investments have helped the fund take a call on interest rates. Its medium sized stable corpus, has aided the with its active management strategy.
With a safety orientation and active management has yielded a middle of the road performance at 12.68% since launch. Besides, this conservative investment strategy helps in Zurich India High Interest in offering stable income.