They also use the analysis of sell-side research and credit-rating agencies to form a view on companies' creditworthiness
Prashant Pimple is a competent manager and has 15 years of experience on the fixed-income side. He has been with the fund house for more than a decade and has exhibited a flair for managing duration strategies. Amit Tripathi, chief investment officer-fixed income, also has more than 15 years of experience in fixed income, 12 of which have been at Reliance Nippon Life AMC. Currently, the team consists of seven credit analysts and two dealers.
Investment strategy
The investment strategy is research-intensive and relies mainly on fundamental research. The manager primarily focuses on active duration bets. Given that duration is an integral part of the strategy, studying the macroeconomic scenario for taking an interest-rate directional view forms the broader framework of the process. The investment team incorporates the views of key external economists and an in-house economist on factors such as gross domestic product growth, inflation, fiscal deficits, and trends in government borrowing. The manager maintains a quality portfolio and invests only in AAA-rated securities. The investment universe of about 425-450 companies is tracked by the experienced research analysts while the investment team focuses on the business, management, financial health, and promoter group. They also use the analysis of sell-side research and credit-rating agencies to form a view on companies' creditworthiness.
The AMC has a predefined template for the duration and credit risk that funds can take based on their mandate. These ranges become the boundaries within which a manager operates. The exposure limits are decided by the head of fixed income, Amit Tripathi, or the investment committee, depending on inputs provided by the credit research team on the type of issuer and the tenure of the issue. Periodic reviews are based on the quality of the credit to determine if a change in position is required.
Trailing returns
The fund has outperformed the benchmark over the one, three, five and 10-year periods.
Portfolio composition
While 60%-70% of the fund's portfolio reflects the strategic long-term view, 30%-40% of the portfolio is invested tactically to take advantage of changes in short-term interest rates.
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