Crisil launches floating rate fund analysis

Crisil FundServices today said it has launched a floating rate fund (floater) category for mutual fund performance rankings, as assets under management of floating rate funds increased by over 360 per cent to Rs 17,016 crore as on September 30, 2004 from Rs 3,614 crore as as December 31, 2003.

Floating rate funds now account for around 11.5 per cent of the mutual fund industry's assets under management, up from 2.6 per cent as on December 2003.

The category reported an average point-to-point annualised return of 4.56 per cent for the 6 months ended September 30, 2004, as compared to the CRISIL Fund~dx at -2.64 per cent and CRISIL MF Gilt Index at -4.56 per cent for the same period.

Floater is Crisil's eighth category of analysis under its Composite Performance Rankings (CRISIL-CPR). This takes cognizance of the growing popularity and relevance of floaters in recent times, especially in a scenario where there is an upward pressure on interest rates.

CRISIL-CPR covered seven categories of funds so far "" equity diversified, debt, debt short-term, balance, liquid, gilt long-term and monthly income plan.

Head of financial sector ratings at Crisil, Krishnan Sitaraman, said "With pure debt schemes giving negative returns over the last 6 months owing to hardening of interest rates, floating rate schemes have gained popularity with investors and fund houses."

CRISIL FundServices ranked 12 floater schemes eligible on the basis of a minimum corpus size and net asset value. HDFC Floating Rate Income Fund -Short-Term Plan-Growth tops the charts at CRISIL-CPR one, indicating very good performance, while Grindlays Floating Rate Fund -Growth and Prudential ICICI Floating Rate Plan-Option B-Growth are at CRISIL~CPR two , representing good performance. The ranking of six schemes indicate average performance.