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HDFC Medium Term Debt Plan

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HDFC Medium Term Debt Plan
Morningstar India - 07 November 2019

Shobhit Mehrotra is an experienced and skilled manager who joined the fund company in 2004 and has been running this fund since 2007. Mehrotra is supported by a seven-member investment team composed of managers Anil Bamboli and Anupam Joshi, three credit analysts, and two dealers, who also contribute to  the research.

Manager Shobhit Mehrotra seeks to add value through security selection rather than taking duration bets. As expected, the investment approach relies on fundamental research. It entails combining qualitative aspects with quantitative analysis. The investment team prepares the coverage list with a strong focus on the company management and track record, the financial strength of the promoter group, and corporate governance standards. Meetings with management are followed by rigorous quantitative analysis in which the focus is to get a measure of the company’s creditworthiness. The fund company uses a proprietary model in which qualitative and quantitative inputs are used to arrive at a credit score for each issuer. This in turn helps managers determine the exposure they can take to each issuer. Here the investment team lays more emphasis on risk control, thereby focusing on balancing safety, liquidity, and return.

Investment in AAA rated securities is in the range of 65 per cent-70 per cent. Investments in single A/equivalent rated securities are typically avoided or done in a controlled manner. Mehrotra adopts a “buy-and-hold” approach and usually refrains from churning the portfolio frequently.

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