Despite assets fluctuation, it has managed to be consistent with regard to returns and its expense ratio
Consistency has been Templeton Floating Rate LT Super Inst's trademark, which is reflected in its long-term performance. Over the 2-year period ended October 31, 2009, it delivered an annualized return of 8.87 per cent, which put it amongst the third highest among its peers.
It has outperformed the average in all quarters and has managed to consistently maintain its expense ratio at 0.30, despite assets fluctuating widely. Assets dropped from Rs 2,035 crore (April 2008) to Rs 127.54 crore (December 2008) to bounce back to Rs 1,873 crore (October 2009).
The fund invests in various instruments including Mibor-linked debentures/ deposits. Structured Obligations have accounted for an average 36 per cent of the fund's portfolio since launch and has even gone up to 69 per cent (June 2008) of the fund's portfolio.
Exposure to Commercial Paper (CP) has dropped from 21.92 per cent (June 2009) to 6.96 per cent (September 2009) while allocation to Certificate of Deposits (CDs) has moved up from almost nil in June 2009 to 46.75 per cent (September 2009). The fund manager employs interest rate swaps to hedge the portfolio.
