100365  |  INF109K01365  |  5 star  |  Bronze

NAV

$ 54.43

1-Day Total Return

0.05
%
INR | NAV as of 15/12/2017 10:30:00 | 1-Day Return as of 15 Dec 2017

TTM Yield

0.00%

Load

Multiple

Total Assets

20.7 bil

Expenses

1.94%

Fee Level

--

Turnover

878%

Status

Open

Min. Inv.

5,000

30-Day SEC Yield

--

Category

Intermediate Bond

Credit Quality/Interest Rate Sensitivity

High/Moderate
Author
Morningstar's Take | 21/08/2017
by Nehal Meshram

We see enough merit in this fund to upgrade it to a Morningstar Analyst Rating of Bronze from Neutral.

The team behind this offering remains one of the largest fixed-income teams in the industry specialising in different areas. Lead manager Manish Banthia took over after Avnish Jain’s exit in September 2013 and plies an active investment style. He is driven by the quest for value with a contrarian bent. He is keenly attuned to market expectations and developments while constructing the portfolio. He is backed by two fund managers, four research analysts, and five dealers, two of whom act as comanagers.

Banthia built his reputation by making long-term, high-conviction bets on fixed-income securities that he finds fundamentally compelling, even when they fall outside of the consensus view. Duration plays and spread analysis are the mainstays of the investment strategy. The team has a comprehensive in-house investment approach driven by a seasoned group of investment and risk management professionals. Close communication between the fund managers and research analysts is used to encourage idea generation. The investment approach is research-based and combines qualitative aspects with quantitative analysis. The manager focuses on the macroeconomic scenario, liquidity conditions, spreads, and other short-term influencing factors to define the asset allocation and maturity profile.

The fund maintains a higher-duration strategy largely through government securities/state development loans. Based on the spread analysis, the manager keeps oscillating between G-secs, SDLs, and corporate debt papers, but taking credit bets isn’t a major part of the strategy. However, investors should note that given the investment style, the fund could expose them to higher volatility than peers. With this caveat, however, it remains a compelling offer if held for a longer period. The managers have built a solid record and the fund has handily beaten its benchmark and peer group across time. The fund’s fees offer room for improvement, but the overall execution of the strategy has been good. We are upgrading the fund to a Bronze rating.

Morningstar Analyst Rating™
Analyst Rating
Portfolio Role

Higher duration portfolio with emphasis on quality portfolio to maintain portfolio liquidity.

People

Investment team ranks well on the duration as well as credit management front.

Parent

ICICI Prudential AMC’s stewardship is in line with the industry norm.

Process

Research driven process with focus on duration plays, spread analysis, and yield-curve positioning.

Performance

Track record under Banthia remains phenominal with a higher duration stance.

Price

Expense ratio higher than the category median, making it an expensive proposition.

Important Disclosures

Unless stated otherwise, this report was prepared by the person(s) noted in their capacity as Manager Research Analysts (i.e., fund analysts) employed by Morningstar, Inc., or one of its affiliates. It has not been made available to the issuer prior to publication.

Analyst Ratings are subjective in nature and should not be used as the sole basis for investment decisions. Analyst Ratings are based on Manager Research Analysts’ expectations about future events and therefore involve unknown risks and uncertainties that may cause such expectations not to occur or to differ significantly from what was expected. Analyst Ratings are not guarantees nor should they be viewed as an assessment of a fund’s or the fund’s underlying securities’ creditworthiness.

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