Taking major credit bets is not fund’s strategy

Manish Banthia has extensive understanding of the fixed-income market with an overall experience of 13 years. He joined the asset management company in October 2005 and has been the manager of this fund since September 2013. He is well supported by his team which remains one of the largest fixed-income teams in the industry specialising in different areas.

Investment strategy

The investment approach is research-based and combines qualitative aspects with quantitative analysis. Banthia combines macroeconomic factors such as the credit and interest-rate cycles, economic growth rate, inflation, and borrowings data with short-term factors such as overnight rates and liquidity conditions when plotting the portfolio’s duration. 

The fund uses an investment process with a focus on safety, liquidity, and returns. It has a comprehensive in-house investment approach driven by a seasoned group of investment and risk-management professionals. Close communication between fund managers and research analysts is used to encourage idea generation. Top-down macro themes outline the overall strategy and provide a framework for bottom-up security selection. Calls on duration and interest-rate direction are determined through a detailed analysis of various influencing factors such as inflation, gross domestic product growth, trade deficit, private sector and government borrowings, monetary policy, and so on. Before implementing any trades, final qualitative research and quantitative analysis is done to understand and monitor risk in the portfolios. 

The fund maintains a higher-duration strategy largely through government securities/state development loans. Banthia keeps oscillating between G-secs, SDLs, and corporate debt papers based on the spread analysis, but taking credit bets isn’t a major part of the strategy.

Trailing returns

The fund has outperformed the benchmark over the one, three, five and 10-year periods.

Portfolio composition

In addition to G-secs and SDLs, the fund also invests in corporate bonds of companies such as Narbad, HDFC, Great Eastern Shipping and Reliance Utiliites and power.