Fund takes active duration bets to generate returns

Abhishek Bisen is an experienced manager and has been with the fund house since October 2006. He has been co-managing this fund since April 2008 and took over sole management responsibilities since July 2015.

Investment strategy

The process blends views on macroeconomic factors with fundamentals of the company, while assessing government securities and corporate bonds for its investments. Bisen generates return through active management by capturing positive price and credit spread movements by oscillating between government securities, state development loans and corporate bonds.

The fund is focused towards taking active duration bets and invests primarily in high quality credits. The manager seeks to identify duration bets through macroeconomic factors by incorporating views from internal and external economists. Credit analysis is divided into banking, non-banking financial companies and manufacturing debt and they are further demarcated into three buckets based on the strength of the business, management, and corporate governance standards.

He intermittently takes high credit calls and holds higher cash to take opportunistic trading calls when markets are volatile. While selecting credits, he prefers banks and NBFCs and typically invests in liquid ‘AAA’ rated corporate bonds. The fund has invested in SDLs, given attractive spreads with regard to central government securities.

The manager historically maintained a higher duration, but has recently cut duration.

Portfolio composition

The fund has predominantly invested in ‘AAA’ securities, with some portion of ‘AA’ and ‘A’-rated securities. In addition to government securities, some of the corporate bonds the fund has invested in include NABARD, HDFC Ltd, Power Finance Corporation, Muthoot Finance, etc.