Templeton & #8217;S Gilt Edge

Templeton India Government Securities Fund (TIGSF), the largest government securities fund with an asset base of Rs. 460 crore was launched in June-1999. The fund has delivered a handsome return of 18.04 percent since launch, with its best one-year performance of 26 per cent ending September 9, 2001 in recent past.

All medium and long-term government funds have posted strong gains over the last year. The top funds in the group outperformed the bottom funds by more than 30%. This gap is largely due to the duration of the bonds that the various funds owned.

Those that own bonds with longer-than-average duration tend to outperform their peers when interest rates fall and under-perform when rates rise.

And the fund has been aggressive on its duration bets. For example, in June 2001, anticipating an interest rate cut, the average of the 22 gilt funds portfolio maturity was 7.67 years, while Templeton India Government Securities Fund had stretched the longest