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Nippon India Low Duration Fund

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Nippon India Low Duration Fund
Morningstar India - 11 February 2020

Anju Chhajer is an experienced manager, managing this fund since October 2009 and has more than 15 years of experience on the fixed-income side. A stable and experienced fixed-income team is one of the key strengths of the AMC. The fund house has witnessed a change in the ownership, resulting in Reliance Mutual Fund been renamed as Nippon India Mutual Fund. However, all the funds continue to remain under the helm of the same management that has led the AMC for all these years.

The investment universe of about 250 companies is tracked by the experienced research analysts while the investment team focuses on the business, management, financial health, and promoter group. The team also uses the analysis of sell-side research and credit rating agencies to form a view on companies’ creditworthiness. The call on duration is taken by studying the macroeconomic scenario. The AMC has a pre-defined template for the duration and credit risk that each fund can take. The exposure limits are decided by the head of fixed income Amit Tripathi, or the investment committee, depending on inputs provided by the credit research team on the type of issuer, and the tenure of the issue. Periodic reviews are done based on the quality of the credit to determine if a change in position is required.

The manager historically has maintained 80 per cent exposure in AAA rated assets with the balance in sub-AAA rated assets. She avoids investing in papers whose short-term ratings are less than A1+. The past year was challenging for the fund as it witnessed few downgrades and eventually had to mark down the holdings.

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