ICICI Pru Long-Term Bond Fund

The team behind this offering remains one of the largest fixed-income teams in the industry specialising in different areas. Manager Manish Banthia plies an active investment style and is driven by the quest for value with a contrarian bent. He is keenly attuned to market expectations and developments while constructing the portfolio.

The fund uses an investment process with a focus on safety, liquidity, and returns. It has a comprehensive in-house investment approach driven by a seasoned group of investment and risk-management professionals. The investment process integrates quantitative and fundamental analysis following a disciplined and value-based approach. Top-down macro themes outline the overall strategy and provide a framework for bottom-up security selection. Calls on duration and interest-rate direction are determined through a detailed analysis of various influencing factors such as inflation, gross domestic product growth, trade deficit, private sector and government borrowings, monetary policy, and so on. Before implementing any trades, final qualitative research and quantitative analysis is done to understand and monitor risk in the portfolios. Banthia tries to exploit opportunities between AAA-rated bonds, G-secs, and SDLs.

Taking lower-credit bets is not a major part of the strategy, despite the fund’s mandate to maintain a credit profile of 80:20 the sub-AAA rated securities rarely account for more than 10% of the portfolio. The manager has been avoiding investment in AA and below rated bonds. This aspect of the strategy is also influenced by the intent to keep the portfolio liquid. However, Banthia takes tactical bets whenever he finds attractive opportunities.