Fund Pick: Aditya Birla Sun Life outrunning rate hounds tactically

Nimble duration calls gave fund agility to sidestep rate shocks and seize yield pockets

Launched in March 1997, Aditya Birla Sun Life Corporate Bond Fund has ranked in the top 30 percentile of corporate bond funds in the Crisil Mutual Fund Ranking (CMFR) for each of the past four quarters through March 2025. As of March 2025, its month-end assets under management stood at ₹24,570 crore, up from ₹15,461 crore in March 2022. 

Kaustubh Gupta has managed the fund since April 2017. It aims to deliver steady returns with high liquidity through an actively managed portfolio focused on high-quality debt and money market instruments. 

Performance that holds up

 

The fund has outperformed the benchmark (Crisil Corporate Debt A-II Index) across the one-, two-, three-, five-, and seven-year trailing periods. It has also outpaced its category peers (funds ranked under the corporate bond fund category in the March 2025 CMFR) over the two-, three-, five-, seven-, and 10-year horizons. 

To put that in numbers: ₹10,000 invested in the fund on June 27, 2005, would have grown to ₹48,501 by June 26, 2025 — translating into an annualised return of 8.21 per cent. In comparison, the same amount would have grown to ₹39,708 (7.13 per cent) in the category and ₹49,568 (8.33 per cent) in the benchmark. 

Timed for yield

 

Over the past three years, the fund’s modified duration has ranged from 1.26 to 4.05 years — averaging 2.81 years, slightly above the peer average of 2.72 years. The fund extended its duration to 4.05 years in May 2025 from 3.64 years in May 2024 to lock in higher yields ahead of an expected rate cut.

 

Heavy on G-secs, light on risk 

Over the past three years, the fund’s average exposure to non-convertible debentures and bonds was 66.45 per cent, while money market securities (certificates of deposit and commercial papers) made up 1.37 per cent. 

While the fund, like its peers, leaned heavily on top-rated (AAA/A1+) instruments, its allocation — averaging 68.62 per cent — was slightly below the peer average of 72.92 per cent. 

Its exposure to AA/AA+/AA- rated papers averaged just 0.65 per cent, lower than the peer group’s 1.58 per cent. However, it stood out with a higher average holding in government securities at 27.34 per cent, compared with 19.79 per cent among peers.