HDFC Gilt Fund

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HDFC Gilt Fund
Morningstar India - 17 June 2020

Anil Bamboli is a competent and experienced manager with an overall experience of 24 years. He is supported by a highly experienced, adequately resourced, and stable investment team that adds to the fund’s appeal.

The fund’s investment process is based on a comprehensive qualitative and quantitative due diligence process. Its assessment of inflation, money supply, private-government borrowings, fiscal and monetary policy, and the global interest-rate scenario leads to the selection of a duration target. In addition to duration management, yield-curve positioning and interest-rate direction calls form the basis of portfolio construction. Anil Bamboli follows an aggressive investment approach. Historically, the fund has maintained higher duration as against its peers and has always stuck to the investment mandate. However, with the recent change in the fund mandate, it has the flexibility to change the maturity profile based on the manager’s view on interest rates. The manager focuses on high-conviction trades rather than taking tactical bets. This is reflected by the fund’s lower portfolio turnover ratio as compared with its peers. Furthermore, he does take marginal tactical trading bets whenever he identifies mispriced opportunities; however, exposure to these is kept in check.

The investment approach centres on building the portfolio by having government securities issued by the central government. Bamboli does not shy away from taking relatively small exposure in state development loans if they are trading at attractive yields.

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