Just About Average

Not a chart topper, it stays in vicinity of the category average. Launched just before the rising interest rate scenario, it has seen 14 repo rate hikes since its launch. The fund manager has refrained from taking duration calls and the average maturity of the portfolio has never exceeded two years in its entire history, going above one year only on 10 occasions. Compared to other short-term funds, it follows a relatively conservative stance by keeping its maturity on the lower side.

It went to as low as 18 days in February 2011. As the liquidity crunch pushed up short-term rates, the fund benefited from its exposure to lower maturity papers. In the first quarter of this year, the fund beat its category by a margin of 20 bps. The portfolio appears slightly concentrated in the top holdings but there is no compromise on quality. Money markets instruments like Commercial Paper (CP) and Certificates of Deposit (CD) have dominated the portfolio with a recent renewed interest in debentures. Its expense ratio is slightly on the higher side in comparison to its peers.