Going steady

FUND PICK: GRINDLAYS SUPER SAVER INCOME

As on Dec 31, 2003

Value (Cr)

Net assets (%)

GoI 2014 7.37%

323.36

12.71

Reliance Industries

259.24

10.19

IRFC

234.57

9.22

HDFC

183.18

7.20

GoI 2017 7.46%

154.17

6.06

GoI 2015 9.85%

139.42

5.48

GoI 2012 7.4%

132.8

5.22

IDBI

124.41

4.89

GoI 2011 9.39%

94.9

3.73

Power Finance Corpn.

94.39

3.71

GoI 2019 6.05%

93.62

3.68

NTPC

79.12

3.11

GoI 2017 8.07%

74.29

2.92

Exim Bank

74.29

2.92

NTPC

55.21

2.17

Loan Securitization Trust

52.41

2.06

Others

50.88

2.00

Rabo India Finance

41.47

1.63

Indo Gulf Corp

27.73

1.09

ICICI Bank

27.22

1.07

 The fund's first year has been the highlight of its performance so far. It was of course helped by a series of rate cuts in the year, which kept bond prices soaring.  As a result of its higher portfolio maturity the fund also suffered more in the post 9/11 volatility in gilt markets.  Though it bought average maturity down to 4.17 years from 4.83 in August, it was not sufficient to prevent the fund from losing more than peer group schemes.  A quick increase to 4.75 years following the rate cut in the monetary policy enabled the fund to gain more on the upside.  On the credit risk spectrum, while its peers hold out that lower-rated corporate bonds stand a strong chance of quality upgrade when economy recovers, the fund seems to believe in the opposite, that the chances of further downgrade are higher with lower-rated bonds. Thus the exposure to lower-rated corporate bonds has nearly always been under 10 per cent.  Outlook: With an unflinching commitment to a quality portfolio, reasonably active interest rate bets and expenses in line with the category, Grindlays Super Saver Income Fund remains a good choice.