AIG INDIA TREASURY SUPER INSTITUTIONAL
Launched in September 2007, the fund's historical performance can only be traced over eight quarters. However, in this short period, it has done fairly well. Though its returns do not stray far from the category average, it has delivered consistently. Its low expense ratio of 0.30 adds to its appeal.
The fund invests across a variety of instruments, though the bulk of the portfolio tends to be in Certificates of Deposit (CDs). On an average, CDs have accounted for 51 per cent of the portfolio. The fund tends to be cautious and favours CDs of public sector banks. As of now, of the 74 per cent allocation to CDs, as much as 68 per cent has been allocated to CDs of such banks.
The average maturity of the portfolio has never exceeded one year, barring September 2008, when it inched up marginally to 1.05 years. That did not hold for long and it dropped to 0.18 by November 2008. Currently, it is at 0.23.
Though not a huge fund, it is definitely bigger than a lot of its peers, with Rs 734 crore of assets under management.
BIRLA SUN LIFE FLOATING RATE LT RETAIL
The first three years were not exceptionally great for the fund, whose performance began to stand out in 2007 and 2008. This year, too, has been good. The fund delivered a return of 4.01 per cent over the past six months ended January 21.
By the mandate, a majority of the fund's investment has been in floating rate paper. From 2004 to 2008, such instruments were given an allocation of more than half the portfolio, at times even crossing more than 90 per cent. This year, the allocation to floating rate instruments has consistently dwindled to nothing. However, Certificates of Deposit (CDs) and Commercial Paper (CP) have gained a more significant presence. Though the average maturity has always been low, it increased slightly this year.
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The expense ratio is a bit of a concern. It dropped from 0.85 to a low of 0.27 last year. Though still on the lower side, it has crept up to 0.44. Hopefully, it should stay there.
FORTIS MONEY PLUS INSTITUTIONAL
This annual top quartile performer stands tall in the long run as well. Over the one-year period ended January 21, the fund delivered a return of 8.99 per cent.
Even during its worst quarter (October 1 to December 31, 2009), the fund delivered ahead of its peers. It turned in a return of 1.18 per cent.
While the performance is appealing, its expense ratio is not. Though on the lower side at 0.48, it has consistently risen from 0.27 (March 2008).
This year, the fund has been heavily into Commercial Paper (CP) and Certificates of Deposit (CDs). Even then, the average maturity of the fund's portfolio has never exceeded a year and has largely been on the lower side in the category. Over the past year, it touched a maximum of 5.04 months.
Despite the fund's size falling dramatically to Rs 737 crore (December 2008), it has managed to bounce back, with a corpus worth Rs 6,373 crore (December 2009).
ICICI PRUDENTIAL LONG-TERM REGULAR
In terms of performance, this one has made its mark. Though, its expense ratio has fluctuated from a high of 0.90 (August 2008) to a low of 0.22 (March 2009), before stabilising at 0.50. The fund has outperformed its peers in all the years of its existence. Since July 2004, it has never delivered a negative return in any month.
Despite a mandate to restrict allocation in money market instruments to 10 per cent, the maturity of the portfolio has never exceeded one year since March 2006. The fund did invest in long-term paper till early 2006, but from December 2006, it allocated an average 72 per cent of the portfolio to Certificates of Deposit (CDs), at times inclusive of Commercial Paper (CP).
The fund tends to avoid investments in debentures, government securities, structured obligations and securitised debt. From February to June 2009, it was almost wholly in CDs (always more than 90 per cent), though in January 2009, exposure to cash and call money accounted for 94 per cent of the portfolio. Despite the performance, it's tiny at Rs 9.7 crore, down from Rs 183.16 crore almost a year ago.
JM MONEY MANAGER SUPER
Launched in July 2007, it was a show-stopper in 2008. The fund beat the category average by a margin of 1.13 per cent and was the third-best performer among liquid plus funds. To add to its appeal, the expense ratio of 0.35 puts it amongst the lowest in the category. The fund had a poor start. In the December 2007 and March 2008 quarters, it underperformed .Since then, it has beaten the category average every quarter.
Although the fund tends to have a low average maturity, less than a year, it moved up to 9.72 months in March 2009 from around 15 days in the previous month. Currently it is three months (December 2009). The fund largely invests in Certificates of Deposit (CDs) and Commercial Paper (CP) and also takes exposure to privately placed debt instruments. The fund manager does not hesitate in taking huge positions to generate the extra return. For instance, the CP of Sundaram Finance accounted for 76 per cent of the portfolio (February 2009), while the CP of ICICI Securities Primary Dealership accounted for around 70 per cent (April 2009).
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