Sundaram BNP Paribas Ultra Short Term Super Inst is one of the larger players around. It plays it safe by diversifying across holdings and maintaining a low average maturity.
It will not disappoint, nor will it excite. A middle of the road performer, it will not outperform or underperform the category average by a huge margin. That has been the case during the 30 months of its existence. This trait coupled with a low expense ratio certainly puts it in a good light. Although the expense ratio has inched up marginally to 0.29, from 0.21, it is still low — the fourth lowest amongst its peers.
The fund takes exposure to Structured Obligations and bonds, though largely gravitates towards Certificate of Deposits (CDs) and Commercial Paper (CP). Since launch, exposure to these instruments has averaged around 72 per cent of the portfolio.
Allocation to CDs dropped from 49 per cent in the previous month to 29 per cent currently (October 2009) while that of CP rose to 42 per cent from around 31 per cent.
The fund plays it safe by diversifying its portfolio over a large number of holdings as the allocation to a single instrument has rarely gone above 15 per cent. Neither has the average maturity of the portfolio ever exceeded six months and is currently around three months.
