ICICI Prudential All Seasons Bond Fund

Across the world, central banks are fighting to tame inflation. The Reserve Bank of India (RBI) has also increased the repo rate by 225 basis points in 2022. Although inflation has started to dip, it is still above RBI’s comfort zone. Given this, experts believe RBI is not done with raising interest rates, and there may be one more rate hike before it takes a pause. Investors are in a dilemma whether they should stick with short-term debt funds or go for long-term ones instead. If you are also in such a quandary and want to take advantage of the existing market scenario, you might consider ICICI Prudential All Seasons Bond Fund.

Portfolio

The objective of this scheme is to optimise returns through active duration management. The fund follows an in-house debt valuation model to take duration calls in the portfolio. The fund manager’s strategy revolves around structuring the portfolio to capture the positive price change and reduce the impact of adverse price swings. The beauty of the scheme is that when interest rates are high, the fund will act like a long-duration scheme and when interest rates are low, it will behave like an accrual scheme.

Further, the right mix of portfolio spread between corporate and sovereign bonds helps the fund to take advantage of the widening or shortening gap when the need arises.

During the 2018 debt crisis, when debt funds were in the spotlight due to default on papers, all ICICI Prudential MF debt funds came
out unscathed.

Manish Banthia, deputy chief information officer (CIO) and fund manager of the scheme, who has been at the helm for the last 10 years, avoids investing in low-rated paper to boost return. This strategy has worked so far.

Performance

The fund managed to beat its peers and benchmark with decent margins. On a three- and five-year scale, it delivered around 8 per cent annualised return.

OLM Take

Low volatility, lower expenses, and sound fund management makes ICICI Prudential All Seasons Bond Fund a good option for investors who want to take advantage of the emerging opportunities in the debt space and ride the vilatility of market cycles. This makes it an all-weather fund.

kundan@outlookindia.com