Debt fund managers take active calls to risk-proof their portfolios

This comes even as most fund managers do not foresee rate hikes

Debt fund managers are deploying different strategies to shield their portfolios amid an uncertain interest rate scenario.

SBI Mutual Fund (MF) has been raising its cash holdings, while ICICI MF is betting on Government of India (GoI) floating rate bonds to take advantage of their attractive accruals.
 

Meanwhile, most of the fund managers remain bullish on the short-to-medium duration of the yield curve.

“Portfolio strategy, while being aligned with the fund templates, is based on the expectation that liquidity and monetary policy in India may remain tight in the near future.
 

That broadly involves a lower duration stance and adequate portfolio liquidity