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Grindlays Super Saver Income

Dhirendra Kumar

Grindlays Super Saver Income is the first scheme from the ANZ Grindlays Mutual Fund, launched in July 2000. With a minimum investment of Rs 5000, investors can enter and exit on a no load basis. Under its yearly dividend option, the fund declared its first dividend of 6% in December 2000.

The fund aims to offer above average returns with below-median risk. Towards this end, the fund aims to create a blue-chip portfolio with emphasis on active duration management. Aided by its 3D strategy, which monitors economic fundamentals, market philosophy and market valuation, the fund determines its composition and duration of the portfolio.

FUND BASICS   Objective    Size (Cr)    NAV: 27/04/2001    Exit Price    Entry Price    Total Return   Income   644.17   11.06   11.06   11.06   10.60%

In line with this philosophy, the fund has invested its steadily growing corpus in quality AAA rated instruments. The fund has, on an average, held around 35% exposure in sovereign bonds while the rest is invested in corporate debt. These instruments accounted for 96.41% of the corpus in January 2001. Besides offering quality, these instruments provide liquidity in order to re-align portfolio or meet redemption pressure.

BENCHMARK COMPARISONS (%)      1M    3M    6M    1Yr    3Yr   Fund   1.37   3.75   8.64   -   -   JP Morgan G-Sec Index   2.43   4.18   11.70   12.01   14.50   Obj. Avg.   1.29   3.40   7.76   10.74   12.17

While being conservative on the credit quality, the fund has chosen to actively manage interest rate risk. Bond prices fluctuate in response to interest rate outlook. They gain when interest rates move down and lose value when rates move up. Amid tightening of interest rates, the fund started off with a conservative maturity profile in July 2000. However, with the easing of interest rates amid IMD inflows, the fund increased it portfolio maturity to participate in the rally later in 2000. The fund currently has a maturity of 3.8 years. With a quality portfolio and active management, the fund has posted a simple return of 10.6 % since launch. For the six months ending April 27, 2001 the fund offered a return of 8.64% against a category average of 7.76%.

While the fund is too young to be evaluated, Grindlays Super Saver Income seems to prefer holding a conservative credit quality, while actively managing the interest rate risk.

Top Holdings (03/04/2001)      % of Assets   GOI 2008   14.27   HDFC   10.33   IDBI   9.85   I C I C I   9.11   IR&FC   8.64   GOI 2009   8.46   Power Finance Corp.   4.73   Reliance Industries   3.72   GOI 2007   3.41   Tata Power Co.   3.12   Hindalco Industries   2.39   Associates India Financial   2.19   Nirma   2.19   Inox Air Products   1.57   HPCL   1.56

Source: Value Research

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