DSP Strategic Bond Fund
A truly dynamic fund, but with new managers, we maintain a cautious view on the fund. Experienced team, relatively new with the fund house, needs time to exhibit capability. We would like to watch and build our conviction in the way both the portfolio managers navigate future market conditions.
The fund manager follows a disciplined investment process that focuses on duration bets, credit selection, and spread analysis. The fund is dynamically managed through a duration-based strategy. The portfolio manager is prompt in making changes in the portfolio, based on the interest-rate cycle, to limit the impact on performance.
Performance following the frequent change in management has been a concern.
This fund house has displayed good stewardship.
- Analyst Rating: Neutral
- Star Rating: 4 stars
- Credit Quality: High
- Interest Rate Sensitivity: Moderate
- Fund Manager: Saurabh Bhatia
- Morningstar Analyst: Nehal Meshram
- Date of Analysis: June 2019
Read the brief analyst note here
IDFC Dynamic Bond Fund
This fund is a solid option to effectively navigate interest-rate volatility.
Research-driven with a focus on duration plays, the manager invests dynamically across the yield curve and segments. The fund manager has a strong track record in running duration strategies.
He doesn’t shy away from having a significant exposure to a single segment if his views on valuations and interest rates suggest so. For instance, between August 2014 and December 2015, he was fully invested in government bonds given his view that the interest rates have peaked and headed south.
The fund has delivered a strong performance under Suyash Choudhary. He constructs the portfolio with an emphasis on safety and liquidity. Hence, taking credit bets is not a part of the strategy, which has enabled him to tide over credit risk more comfortably than most of his peers.
IDFC has better investment practices in place now than in the past.
- Analyst Rating: Silver
- Star Rating: 4 stars
- Credit Quality: High
- Interest Rate Sensitivity: Moderate
- Fund Manager: Suyash Choudhary
- Morningstar Analyst: Himanshu Srivastava
- Date of Analysis: June 2019
Read the brief analyst note here
SBI Dynamic Bond Fund
The fund follows a highly structured process with a mix of top-down and bottom-up considerations. The fund is driven by a flexible mandate to move across the segment with an active-duration strategy.
The portfolio is constructed purely based on the underlying instrument's liquidity. Credit bets are avoided. It primarily invests in government securities, state development loans, public sector undertaking AAA bonds, and a few nonbanking financial companies with quality names. The manager sometimes invests in extreme long debt instruments; they are not very liquid, but the exposure limit is capped at 10%-15%.
The team’s experience and stability instill confidence in its ability to run the fund efficiently over the long run. A standout performance has been delivered under the current manager’s helm.
- Analyst Rating: Bronze
- Star Rating: 5 stars
- Credit Quality: High
- Interest Rate Sensitivity: Moderate
- Fund Manager: Dinesh Ahuja
- Morningstar Analyst: Nehal Meshram
- Date of Analysis: May 2019
Read the brief analyst note here
UTI Dynamic Bond Fund
The fund is led by an experienced manager who prefers consistent returns over taking aggressive bets.
The fund’s long-term performance continues to remain impressive despite short-term blips.
This dynamic fund invests in a combination of government securities and high-quality debt papers. The fund’s average maturity can fluctuate significantly based on the manager’s views of interest-rate movements.
The fund’s success depends largely on the team’s ability to allocate between duration and credits, and by the team’s ability to take the right macro calls and position themselves across yield curves.
- Analyst Rating: Bronze
- Star Rating: 2 stars
- Credit Quality: Low
- Interest Rate Sensitivity: Limited
- Fund Manager: Amandeep Singh Chopra
- Morningstar Analyst: Kavitha Krishnan
- Date of Analysis: February 2019
Read the brief fund analyst note here
