Till this fund was taken over by Ritesh Jain, it had a tough time meeting the expectations.
Under Jain, the fund has made a complete turnaround. Both the assets and the fund's performance have taken a turn for the better. In 2008, the fund was the best in its category, with a return of 29.95 per cent (category average, 13.92 per cent). In 2009, it was fifth in terms of performance. So far this year, the fund has matched its category's return of 3.69 per cent (as on September 30).
This average performance could be attributed to its bet on longer maturity paper, while the category is going the other way on rate cut expectations. Since May, the fund has gone for longer tenure debt, while the rest of the funds in the category are going the other way. From 2.99 years in April, it has gone up to 12.82 years in July. Currently, it is at 9.39 years (as of August).
Unlike many, the fund has actively invested in more volatile GoI bonds. At the end of August, it had a 41 per cent exposure to GOI securities and another 32 per cent to debentures, issued by financial companies. It has at times invested in papers issued by telecom and automobile companies as well.
On expenses, the fund is not the cheapest in its category. Till June, it had disclosed that its expense ratio was 1.89 per cent, 33 basis points higher than the category average.
