OUTLOOK

• If the factors supporting India’s cyclical rebound come to fruition, a lot of macro-economic headaches feared at the beginning of the year will ease. Thus some of the fiscal inflexibilities and associated risks of sovereign rating downgrades will abate, the external account will build even further buffers as capital flows remain strong, and hopefully India’s appeal will percolate to global fixed income investors as well.
• Monetary policy will gradually move from the level of emergency level accommodation today to one of still high accommodation. This will likely be a slow process and will involve more discretionary adjustments to the price of liquidity rather than the quantity of it.
• Yield curves will gradually bear flatten. It is very likely that the bulk of this adjustment will be made by the very front end rates. This is not to say that long end rates won’t have to adjust. Rather, the quantum of adjustment there may be of a relatively smaller magnitude when compared with rates at the very front end.
• The starting point today is one of a very steep yield curve. Thus unlike in normal times when the yield curve is quite flat, the decision on duration isn’t a binary one any more. Rather, one has to examine the steepness of the curve and position at points where the carry adjusted for duration seems to be the most optimal.
• Credit spreads, including on lower rated assets, have compressed meaningfully. These reflect the chase for ‘carry’ in an environment of abundant liquidity and funds flow, as well as the relatively muted supply of paper as companies have belt tightened and focused on cash generation. As activity resumes over the year ahead, issuances will likely increase thereby pressuring spreads to rise.

     ASSET QUALITY

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

Category: Gilt Fund with 10 year constant duration
Monthly Avg AUM: Rs352.60 Crores
Inception Date: 9th March 2002
Fund Manager:
Mr. Harshal Joshi (w.e.f. 15th May 2017)
Standard Deviation (Annualized): 4.14%
Modified duration: 6.55 years
Average Maturity: 9.19 years
Macaulay Duration: 6.75 years
Yield to Maturity: 6.06%
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 December 2020)

     RISKOMETER