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Templeton India Liquid Fund

Dhirendra Kumar

Templeton India Liquid fund (TILF) is a short-term debt fund to invest a minimum of 50 per cent in money market instruments and the balance in short-term debt instruments. The fund since April 2000 has been paying weekly dividends in its dividend option. The fund is a no load fund with a minimum investment of Rs 25,000.

TILF was launched in June 1998 and has since its launch given an annualised return of 9.88 per cent. The fund has a portfolio that caters to the totally risk-averse investor with an allocation as high as 60-75 per cent to call markets while the balance is allocated between PSU Bonds, Commercial Paper, Short-term Debentures and Treasury Bills. Though the exposure to call money boosts the NAV during sudden tightening in the money market as call rates shoot up, it deprives the fund of the higher returns on the short-term debt instruments. For instance benefitted during the last reporting Friday when the call rates shot up to 30 per cent.

The large cash position also offers the fund an opportunity to selectively participate in bond market rallies which, the fund precisely did between December 1999 and February 2000 when it increased its investments in Short-term Debentures from 12 per cent to 30 per cent. The fund despite the constraints has posted good performance figures. Currently money at call account for 79 per cent, Commercial Paper and Short-term Debentures 5 per cent each, PSU Bonds 7 per cent and Gilts 4 per cent.

Fund Basics
Objective	Size (Cr) (31/3/2000)	NAV: 4/7/2000	Exit Price	Entry Price	Total Returns (%)
Income	189.89	12.13	12.13	-	9.88
Benchmark Comparisons (%)					30/6/2000
	1M	3M	6M	1Yr	3Yr
Fund	0.91	2.32	4.70	9.72	-
I-Bex Tot.	-0.24	2.20	6.59	15.48	14.50
Obj Avg	0.74	1.51	4.12	9.20	9.50
Top Holdings (31/5/2000)					Net assets (%)
Ranbaxy Laboratories					10.53
Reliance Industries					10.53
Associates India Financial					5.27
BPL					5.27
ICICI					2.66
Cholamandalam Investment & Finance					2.63
HDFC					2.63
ICICI					2.58
GOI 2001					2.11
GOI 2000					2.01
IDBI 2000					1.55

Source: Value Research

Fund File

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