Investment Strategy: The Scheme seeks to maximize risk adjusted returns to the investor through an active management of the portfolio, by elongating the duration of the portfolio in a falling interest rate scenario and reducing the duration at a time when interest rates are moving up.
The Fund Manager would seek to enhance returns by trading on the shape of the yield curve in the short to medium time frame and also on the differentiated premia offered by the market to different issuers of debt.
The portfolio would be constructed with a judicious mix of instruments issued by the universe of eligible issuers across the spectrum. The fund predominantly (minimum 80%) invests in securities issued by Banks, PSUs and PFIs. These securities are expected to have relatively high liquidity and thus investments are likely to be skewed towards "Triple A" (AAA) or A1+ assets.
Portfolio maturity is determined after analyzing the macroeconomic environment including future course of system liquidity, interest rates and inflation along with other considerations in the economy and markets.