IDFC Government Securities Fund - Investment Plan - Regular Plan - Growth
The fund offers a rather straightforward investment proposition, which is to scout for opportunities in the government bond segment. While the fund stays clear of credit risk--and to a large extent liquidity risk--what differentiates it from similar offerings is the duration play, which is a mainstay of the investment strategy.
This is where fund manager Suyash Choudhary’s experience with duration strategies adds value. He plies a free-flowing investment approach which allows him to invest across the yield curve. Fundamental research forms the crux of the strategy. Choudhary analyses the macroeconomic scenario to predict the direction of interest rates. The interest-rate call, the shape of the yield curve, and the anticipation of yield-curve movements form the basis of portfolio positioning. He is also willing to take big bets against the norm if he believes the risk/reward is favourable.
The strategy is not without risk. For instance, the strategy of moving freely across the yield curve hurt the fund’s showing in 2015, when the manager’s expectation of yields softening on the longer end of the yield curve didn’t pan out. The penchant for taking contrarian calls can prove counterproductive as well. The investment strategy’s success also depends largely on Choudhary’s skills, which means there is key-man risk here. Nevertheless, we draw confidence from Choudhary’s presence at the helm, which in our opinion is a big positive. He is an expert in the government bond segment and we believe his skills and research-driven approach should hold the fund in good stead.
Analyst Rating: Bronze
Expenses: 1.47%. The fund’s expense ratio is in line with the category median.
Turnover: 776%
Minimum Investment: 
5,000
Credit Quality: High
Interest Rate Sensitivity: Moderate
Performance: The fund’s performance under Choudhary’s stewardship is noteworthy.
Category: Intermediate Government Bond
