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Skipping credit bets helps cut risks

For corporate bonds, the team lays lot of emphasis on the promoter group, its track record, and corporate-governance standards.

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Suyash Choudhary is a competent manager and boasts an overall work experience of over 16 years in portfolio management. He joined IDFC Mutual Fund in October 2010. He is a seasoned manager in managing duration strategies. His strength lies in his in-depth understanding of the macroeconomic environment, ability to anticipate interest-rate movements, and ability to identify attractive investment opportunities across market segments.

He is at his best when he gets a free hand while investing, and, pleasingly, the fund's strategy allows him to play to his strength. Given duration is an integral part of the strategy, studying the macroeconomic scenario for taking interest rate directional view forms the broader framework of the process.

The interest-rate direction is determined by conducting a detailed analysis of various influencing factors such as growth versus inflation, fiscal and current account deficit, private sector and government borrowings, fiscal and monetary policy view, money supply, currency market movement, and global interest-rate scenario, among others. This is complemented by an overlay of technical factors where the team examines the demand supply dynamics to get clarity on valuations and direction of yield curve.


Subsequently, interest rate direction calls and anticipation of yield-curve movement form the basis of portfolio positioning in duration terms. For corporate bonds, the team lays lot of emphasis on the promoter group, its track record, and corporate-governance standards.

Suyash Choudhary will not lend to a company facing corporate-governance issues. Additionally, he also looks at companies' competitive standing with regard to peers, its practices, cash flows, liquidity profile, business and financial risks, among others. A noteworthy aspect of the investment approach is that the investment team takes a relatively long-term view and does not pay much heed to news flows.

Once formed, the view is applied across fixed-income funds. Suyash Choudhary constructs the portfolio with an emphasis on safety and liquidity. Thus, taking credit bets is not a part of the strategy, which has enabled him to tide over credit risk more comfortably than most of his peers.

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