Grindlays Super Saver Income Fund - Investment
Investment Objective: Stable long term returns with low risk strategy.
Fund manager: Rajiv Anand |
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Profile |
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Grindlays Super Saver Income Fund (GSSIF) is a relatively new entrant in the domestic mutual fund industry although its sponsor parent (Stanchart Grindlays) boasts of a presence in the country for many decades now. Launched in June 2000, the fund has made rapid strides to become one of the most recognised names in the debt fund segment. Over the past 12 months the fund (growth option) has appreciated by nearly 17% and about 16% since inception (compounded).
As on August 31, 2001, GISSF's net assets under management amounted to more than Rs 20 bn. What is particularly noteworthy is that the fund has accumulated this much within a period of just 15 months.
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| Is this fund for you? |
Entry load: Nil
Exit load: Nil
Risk: Low
Return: Low
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GSSIF is ideal for investors above 40 years who will find its low risk profile appealing and even comforting in these volatile times. The fund compares favourably with other income funds in its peer group. It is also more tax efficient than other comparable investment avenues like bonds and fixed deposits (FDs). Even investors below 40 years can invest in GSSIF as the fund is a good proposition given the increasing volatility in equity markets. Being an income fund with investments in highest safety instruments, it is a low-risk, low-return investment.
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| Performance Analyses |
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Peer Table
| INCOME FUNDS |
NAV (Rs) |
1-MTH |
6-MTH |
12-MTH |
INCEP. |
| PIONEER ITI INC BLD (G) |
17.5 |
0.3% |
8.8% |
17.8% |
13.9% |
| GRINDLAYS SP SAV G |
11.9 |
-0.1% |
8.3% |
17.3% |
16.4% |
| PRU ICICI INC G |
15.0 |
0.2% |
7.6% |
16.2% |
13.1% |
| BIRLA INC. B |
21.1 |
0.0% |
7.8% |
15.7% |
14.5% |
| HDFC INCOME G |
11.7 |
0.1% |
8.0% |
15.3% |
15.1% |
(Returns over 12 months are annualised)
Portfolio Strategy
Rating allocation
GSSIF's latest portfolio (as on August 31, 2001) reveals that the fund has a strong penchant for AAA rated securities (nearly 90% of net assets), with AA+ and lower paper (10%) accounting for the balance. It is evident from the fund's portfolio that the fund manager has placed safety of capital over all other factors and has managed to post a good performance without compromising on safety.
Asset allocation
GSSIF has over 55% (of net assets) in corporate bonds, 38% in government securities (gilts), 5% in call/cash and 2% in money market. The fund's assets are very liquid as they are composed largely of AAA corporate bonds and gilts. The fund's average maturity is 58 months, which is at the shorter end (relatively), when compared to some of its peers that are at the longer end (more than 7 years). By remaining invested at the shorter end the fund has curtailed risks arising from volatility in bond prices that hit longer dated paper the most.
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| Outlook |
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GSSIF's performance in its brief history should serve as an indicator of its fund management skills. However, the fund was helped in no short measure by the bull-run in bond prices over the last few months. Nevertheless the fund's success in combining safety with returns is commendable. Also the fund has invested at the shorter end, so it won't be too adversely affected from volatility in bond yields from panic in the aftermath of the US attacks.
Being an income fund, we recommend investment with a minimum 24-month horizon.
If you are in Mumbai and are interested in mutual funds or other investment products, please register here
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