ABSL MF’s new CRISIL-IBX Financial Services 3 to 6 months Debt Index Fund has found a sweet spot in terms of positioning which has enabled it to race past Rs.3000cr AuM.
A roll down strategy with a portfolio comprising high quality BFSI papers at a portfolio YTM of 7.7% makes this fund an attractive proposition in terms of high yields as well as lower interest rate risk.
Buying 6 month papers and collecting gains as they roll down to 91 days – where yields are soft on account of sizeable demand from liquid funds is a smart, all-weather strategy which this fund executes.
The fund which is positioned in between liquid and money market funds, offers an attractive “parking-money” alternative for a range of investors – from individual investors who are setting up STPs into equity over a few months to SMEs and businesses which have 1-month or more kind of surpluses and even to stock market traders who can use this fund as collateral for margin.
Speaking about overall fixed income markets, Harshil believes the currency depreciation we saw in recent weeks is a reaction to it being managed higher while other currencies depreciated – INR just played catch-up, and that’s now largely done – which means less probability of currency impacting interest rate moves in the near term.
Commencement of a rate cut cycle offers opportunities in short term funds as well as longer duration G-Sec funds.