Normally pick debt investment based on the investment horizon.In last 6 months We, My Assets Consolidation have recommended Reliance Dynamic to clients here is the result.
Reliance Dynamic Bond Fund is an all - weather fund positioned to take advantage of the constantly changing fixed income scenario by varying duration and the portfolio characteristics dynamically.
The fund has a dynamic asset allocation structure enabling complete flexibility in investment in debt instruments which may include investments in corporate and PSU bonds, Government Securities, money market instruments, securitized debt etc of varying tenors and the quantum of investments in any of the above mentioned categories is also flexible.
Reliance Dynamic Bond Fund - Growth
Corpus (in Crs) : 5928.66
3 Months 6 Months 1 Year
22.74% 20.13% 16.12%
Unique Positioning..!
An all - weather fund positioned to take advantage of the constantly changing fixed income scenario (by taking active view of interest rate scenario) by varying duration & the portfolio characteristics dynamically.
Strategy..!
On one hand increased allocation to G-secs would help the fund to take higher duration advantage in a falling interest rate scenario and exposure at shorter end of the curve would help the fund, if the expectation of steeping materializes.
Ideal for..!
Investors who want to make allocation to fixed income & do not want to time the markets could consider investing into the fund, which would take active calls on the market and manage the fund dynamically to provide optimum returns for investors.
Ideal Investment Horizon..!
1 year & above
Current Strategy of the Fund:
Increased G-sec allocation over the last month and used the rise in yields post November policy to buy at lower levels. Currently G-sec allocation is over 60 % (including SDLs).
Tactical allocation on the G-sec space with some allocations at the longer end and State Govt securities (SDLs)to benefit from higher spreads
Current allocation has an optimal mix of long duration G - Secs, SDLs, PSU corporate bonds (5 to 10 year space).
Corporate bonds offer very good accruals along with duration.
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| Suresh Parthasarathy |
Active Duration Management- Consistent out performance above Last 1 year
The fund true to its mandate has actively managed the durations resulting in strong outperformance. Since June 2011 the fund steadily increased maturities primarily through longer end G-secs and AAA PSU Bonds as rate hike cycle peaked and inflations was expected to come down on base effect.
However given the key factors like stubborn inflation, depreciating rupee, higher than expected borrowing calendar, tight liquidity etc the fund manager tactically reduced maturities, pared off G-sec exposure completely in March 2012 and increased allocations to Bank CDs. From peak duration of over 6 years in Nov 11 the fund cut maturities to around 2.5 years in Mar'12.
Currently given the concerns on economic growth concerns,, declining commodity prices, expectation of moderation in inflation etc, there is increased hopes of cut in rates and the fund manager increased maturities through tactical allocations in longer end G-secs , SDLs while the allocation to Corporate Bonds was reduced marginally
For More Details...!
Suresh Parthasarathy,
CEO and Chief Financial Planner,
SPP Wealth and Financial Planners P Ltd
My Assets Consolidation
Land Line 044 - 42046359.
Web Site: www.myassetsconsolidation.com
About Mr. Suresh Parthasarathy..!
Mr. Suresh Parthasarathy, is a certified financial planner (CFP), with 20 years’ experience guiding investors. He has researched above 300 mutual funds and has been writing a popular column every Sunday on personal finance in India’s leading financial daily, The Hindu Business Line for about 8 year.
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