Aditya Birla Sun Life Mutual Fund

Monthly Fixed Income Update - September 2018

Sep 28, 2018
5 mins | Views 930
  • India's GDP rose 8.2% in April-June 2018 compared with 5.6% in the same quarter last year owing to strong performance by manufacturing and construction sectors.
  • The strong growth in important sectors like manufacturing, construction, agriculture and gross fixed capital formation suggest that growth momentum is likely to continue.
  • Inflation surprised positively, third time in the row, owing to the benign food inflation. Rupee continued to depreciate owing to the increasing Current Account Deficit and the high crude oil prices. RBI may intervene to protect the currency.

Outlook
  • Retails investors who wish to take exposure to low duration higher credit quality funds can consider Aditya Birla Sun Life Short Term Opportunities Fund (An open ended short term debt scheme investing in instruments such that the Macaulay duration of the portfolio is between 1-3 years). The investors may also take exposure to our credit portfolios like Aditya Birla Sun Credit Risk Fund (formerly known as Aditya Birla Sun Life Corporate Bond Fund) (An open ended debt scheme predominantly investing in AA and below rated corporate bonds) & Aditya Birla Sun Life Medium Term Plan (An open ended medium term debt scheme investing in instruments such that the Macaulay duration of the portfolio is between 3-4 years).

Source: Bloomberg, ABSL AMC Internal Research

Portfolio Action
  • Aditya Birla Sun Life Short Term Opportunities Fund (An open ended short term debt scheme investing in instruments such that the Macaulay duration of the portfolio is between 1-3 years):

    Global cues (Trade Tension & Currency) continued to drive long term rate expectations. We would like to stay on sideways till the global concerns subside and a market gets its calmness back. We like 2-3yr segment in the corporate bonds and would wait for the right time to add. The issuance in the corporate bonds, which has been on the lower side, would provide a window to add in the short end in the right environment.
  • Aditya Birla Sun Life Credit Risk Fund (formerly known as Aditya Birla Sun Life Corporate Bond Fund) (An open ended debt scheme predominantly investing in AA and below rated corporate bonds):

    We have built exposure in high yield papers (below AA rated) which are offering good risk reward proposition. We have been careful in adding adequate security layers, in the form of collaterals and covenants, while underwriting these trades.
  • Aditya Birla Sun Life Medium Term Plan (An open ended medium term debt scheme investing in instruments such that the Macaulay duration of the portfolio is between 3-4 years):

    We have been managing this fund with the dual objective of building a good quality accrual portfolio along with managing the duration actively. In the last few months, several interesting opportunities have presented themselves in the credit markets and we have benefited by adding some credit structures in our funds. Regulators are also taking active interest in developing various facets of corporate bond markets like liquidity, new classes of issuance etc. which will result in healthy activity in the credit market.

All the data mentioned above is as on 31st August, 2018

Aditya Birla Sun Life AMC Ltd /Aditya Birla Sun Life Mutual Fund is not guaranteeing/offering/communicating any indicative yield/returns on investments
 
Mutual Fund investments are subject to market risks, read all scheme related documents carefully.
 
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