Among fixed-income funds that are run with a duration strategy, IDFC Dynamic Bond and IDFC Super Saver Income Fund – Investment Plan are both ranked as worthy candidates.
Both have blossomed under Suyash Choudhary’s stewardship since October 2010. He is seasoned in managing duration strategies. His strength lies in his in-depth understanding of the macroeconomic environment and his ability to anticipate interest rate movements and identify attractive investment opportunities across market segments. He is at his best investing in an unconstrained manner.
The investment strategy complements Choudhary’s investment style. He seeks to add value by taking active duration calls rather than credit bets.
He therefore plies a fluid investment approach that allows him to invest across the yield curve and segments: government securities, corporate bonds, and money market instruments. He does not shy away from taking contrarian calls if he believes the risk/reward is favourable.
The strategy is not without risk. For instance, the strategy of freely moving across the yield curve hurt the fund’s performance if his view on interest rates does not pan out as expected. Likewise, his penchant for taking contrarian calls can prove counterproductive.
We draw confidence from the presence of Suyash Choudhary at the helm, which in our opinion is a big positive. We believe his skills and research-driven approach should hold the fund in good stead going forward. An experienced manager and sound investment process raise our conviction levels.
IDFC Dynamic Bond has been upgraded from Bronze to Silver.
In the case of IDFC Super Saver Income Fund – Investment Plan, the fund’s high expense ratio is a cause for concern as it may affect its performance. Hence we reiterate its Morningstar Analyst Rating of Bronze and do not upgrade it.
