On revisiting his analysis recently, senior fund analyst Himanshu Srivastava upgraded three funds from the ICICI Prudential stable from “Neutral” to “Bronze”.
ICICI Prudential Regular Savings Fund and ICICI Prudential Corporate Bond Fund are both managed by Rahul Bhuskute. This alleviates our analyst’s fears of the lack of expertise on the credit front. Bhuskute is a good choice as far as credit function is concerned.
Bhuskute ensures that the investment strategy is in line with the fund’s investment proposition and skillfully executes it.
The strategy of ICICI Prudential Regular Savings Fund is rooted in credit calls while a pure corporate bond strategy is what defines ICICI Prudential Corporate Bond Fund. In terms of the latter, the bulk of the allocation is in AA rated securities (63%), followed by AAA (26%) and A rated (11%). In the case of ICICI Prudential Regular Savings Fund, the fund manager takes more of a credit risk with 87% of the portfolio in AA and A rated securities, the balance in AAA rated securities. (December 2015 portfolios).
In terms of expense ratio, both funds tend to be higher than the average.
Over the past few years, there have been changes at the helm at ICICI Prudential Flexible Income, nevertheless, the investment process has been consistent. The managers continue to play it safe, investing primarily in AAA or equivalent-rated securities, with higher emphasis on safety and liquidity over the potential for outsized returns. As a result, the fund's portfolio typically has lower credit sensitivity than a typical peer.
