OUTLOOK

The government has been prudent so far in rationing its stimulus response, focusing first on sustenance and keeping a growth stimulus for later. Despite the government’s prudence so far, however, the load on the fiscal is heavy. A necessary condition for financing this is a well-functioning bond market. The measures announced in August should now restore normal functioning and allow the substantial borrowing requirement to start going through without undoing the transmission channel.
Having said that, it is also true that more than 50% of an INR 20 lakh crore plus (center and states combined) borrowing program is still ahead of us. One shouldn’t expect a very large sustainable rally in bonds basis just the current set of triggers, although one should reasonably expect most of the recent aggressive sell-off to get unwound. However re-instatement of orderly functioning now allows participants to start deploying risk capital with more confidence to take advantage of what are quite attractive valuations given the underlying backdrop of an unprecedented growth drawdown and a collapse in credit growth.
The external account is our one significant macro strength today and provides adequate cushion to RBI to persist with a dovish policy for the time-being. For all these reasons, our view remains that the important current pillars of policy will sustain for the foreseeable future. The spike in inflation presents an interpretation problem for now and it remains our base case that it will not shift the narrative away from growth for monetary policy, despite throwing up higher average CPI prints for the year. In our opinion, focus has to be on best quality AAA and sovereign / quasi sovereign. There is no macro logic whatsoever for pursuing high yield strategies.

     ASSET QUALITY

     FUND FEATURES: (Data as on 31st August'20)

Category: Gilt Fund with 10 year constant duration
Monthly Avg AUM: Rs314.56 Crores
Inception Date: 9th March 2002
Fund Manager:
Mr. Harshal Joshi (w.e.f. 15th May 2017)
Standard Deviation (Annualized): 4.14%
Modified duration: 6.29 years
Average Maturity: 8.54 years
Macaulay Duration: 6.69 years
Yield to Maturity: 6.39%
Benchmark: CRISIL 10 year Gilt Index (w.e.f. 28th May 2018)
Minimum Investment Amount: Rs5,000/- and any amount thereafter.
Exit Load: Nil
Options Available: Growth & Dividend Option - Quarterly, Half yearly, Annual, Regular and Periodic (each with payout, reinvestment and sweep facility).
Maturity Bucket:

PORTFOLIO

(31 August 2020)

     RISKOMETER