Fund Pick: ICICI Prudential All Seasons Bond leads in CAGR, strategy

ICICI Prudential All Seasons Bond Fund, launched in January 2010, has featured in the top 30 percentile of the dynamic bond funds category of CRISIL Mutual Funds Ranking (CMFR) for three consecutive quarters through September 2023. Manish Banthia and Nikhil Kabra have been managing the fund since September 2012 and June 2023, respectively. The fund’s assets under management (AUM) rose to Rs 11,427 crore in October 2023, from Rs 4,773 crore in October 2020.
 

It is an open-ended dynamic debt scheme investing across durations, and faces relatively high interest rate risk and moderate credit risk.
 

Consistent performance
 

The fund consistently outperformed its peers (other funds ranked under the dynamic bond funds category in CMFR in September 2023) over the trailing periods under analysis. 
 

An investment of Rs 10,000 in the fund on January 20, 2010 (inception of the regular plan of the fund), would have grown to Rs 32,536 on December 14, 2023, at a compound annual growth rate (CAGR) of 8.85 per cent. In comparison, the same investment in the category and benchmark would have grown at a CAGR of 7.50 per cent to Rs 27,338 and 8.50 per cent to Rs 31,113, respectively. 

Duration management
 

During the past 12 months, as yields of government securities (g-secs) increased, the fund increased its modified duration to 3.31 years in October 2023, from 1.80 years in November 2022. The modified duration for the dynamic bond fund category increased to 3.37 years from 4.76 years. 
 

Portfolio analysis

During the past three years, the fund had a predominant exposure to non-convertible debentures and bonds of financial institutions, averaging 44.21 per cent. Its exposure to g-secs averaged 41.30 per cent, and cash and equivalents averaged 10.01 per cent.

The fund maintained a conservative credit profile in the past 12 months by allocating predominantly to sovereign bonds. Its exposure to sovereign bonds averaged 41.34 per cent. The fund’s exposure to the highest-rated securities (AAA and A1+) averaged 13.24 per cent, lower than the category’s 20.16 per cent. Its exposure to sub-AAA-rated securities averaged 33.74 per cent, higher than the category’s 6.75 per cent.