Commensurate with a risk averse startegy, Chola Triple Ace has posted a total return of 12.98 % since launch. Consider the fund if you wish to avoid unpleasant surprise from your debt fund
08-Jun-2001 •Research Desk
A AAAf rated fund, Chola Triple Ace has posted a total return of 12.98 % since launch to emerge an average performer. The fund holds a consistent track record of dividend payout aggregating to 43.5 % in its over four-year tenure.
Debt funds are ideally suited for investors seeking steady returns and capital preservation. Even here if you want to avoid ant surprises on quality, consider Chola Triple Ace. By its charter, Chola Triple Ace invests in government securities and top rated corporate debt i.e. AAA and P1+ rated instruments only. Besides low credit risk, top rated debt instruments also command superior liquidity in the secondary market. However, the flip side of the quality and superior liquidity is a relatively lower coupon on these instruments. While focussing on AAA rated corporate debt, the fund assumed exposure to gilt's, particularly during market rallies like in May 2001, to book trading profits.
With marginalised credit and liquidity risks by the fund structure itself, only the interest rate risk remains. As bond prices move down with a rate hike, while gaining value when rates move down, with the risk more pronounced with longer maturity portfolio. Chola Triple Ace has been ultra conservative, maintaining portfolio maturity between 2 and 3.5 years. With a sharp growth in its asset base during the past six months, the fund has acquired critical mass to emerge a medium sized fund at 315 crores.
Chola Triple Ace is a conservative yet actively management strategy, which offers a return of 12.98 %. This average performance is commensurate with its risk-averse strategy. Consider Chola Triple Ace if you wish to avoid unpleasant surprise from your debt fund.