100365  |  INF109K01365  |  5 star  |  Neutral

NAV

$ 52.90

1-Day Total Return

0.18
%
INR | NAV as of 5/23/2017 9:30:00 AM | 1-Day Return as of 23 May 2017

TTM Yield

0.00%

Load

Multiple

Total Assets

18.8 bil

Expenses

1.87%

Fee Level

--

Turnover

266%

Status

Open

Min. Inv.

5,000

30-Day SEC Yield

--

Category

Intermediate Bond

Credit Quality/Interest Rate Sensitivity

High/Extensive
Author
Morningstar's Take | 11/08/2016
by Ishwar Chidambaram, CFA

Strategy in place, this fund maintains its Morningstar Analyst Rating of Neutral.

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. Duration plays and spread analysis are the mainstays of the investment strategy. 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 while plotting the portfolio’s duration. He will invest in varying maturity buckets in his quest for attractive yields.

Banthia trades freely among corporate bonds, gilts and cash based on relative valuations. Taking credit bets isn’t a big part of the strategy. This reinforces the portfolio’s liquidity and we believe this tactic gels well with the overall strategy given the emphasis on adding value through duration plays. The investment process is commonplace enough and its success will be driven by skilled execution. A positive for this fund is the presence of CIO-Fixed Income Rahul Goswami in the team. An experienced and skilled campaigner, his expertise in reading the macroeconomic environment and taking duration calls will aid the fund’s cause.

However, investors should note that given the investment style, the fund could expose them to higher volatility than the typical peer. Hence, it is important that they be patient and remain invested through periods of underperformance.

While the fund has delivered a good performance under Banthia’s watch, the performance has come largely in an environment of falling yields. We are yet to witness how he runs the strategy in an increasing rates scenario. Until then, we rate this fund Neutral.

Morningstar Analyst Rating™
Analyst Rating
Portfolio Role

Freely invests across the corporate bond, gilt, and cash segments.

People

Manish Banthia has strong support from CIO Rahul Goswami.

Parent

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

Process

An active investment style that is rooted in duration plays and spread analysis.

Performance

The fund’s performance has been ordinary so far.

Price

The fund is a tad expensive in the Intermediate Bond Category.

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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