Best debt managers of 2024

IDENTIFYING OPPORTUNITIES even when markets were not in line with their view, duration management and adopting a nimble-footed approach helped the best debt fund managers this year. “We have a tack to trade markets whenever we see opportunities and continued to do that this year as well. Even when the market moved against our view, we were able to trade certain segments of the market where we saw value. It helped us gather performance for the funds. We also picked up AA assets early in the cycle, which helped us generate performance,” says Manish Banthia, CIO, fixed income, ICICI Prudential Mutual Fund, the best debt fund manager in the Fortune India Mutual Funds study.

Banthia says one of the opportunities he identified was when the Reserve Bank of India (RBI) introduced new provisioning norms for non-banking financial companies (NBFCs). “Banks kind of moved out of NBFC, which created space in the capital markets. The NBFC yields went up and we capitalised on that and captured the NBFC yields early in the cycle,” he says.

Kaustubh Gupta, co-head, fixed income, at Aditya Birla Sun Life AMC, who grabbed the second spot this year, says market cycles have become shorter, raising the demand for a nimble-footed approach to fund management. “Given that markets have been exposed to multiple risks, we are not taking large, fixated calls to a particular view... We are tactically playing movements in the interest rate cycle. It has worked well for us,” says Gupta.

Anil Bamboli, senior fund manager, fixed income, at HDFC Asset Management Company, says there was anticipation of moderation in global and domestic growth momentum and inflation in the coming quarters since late 2023, which resulted in expectations that central banks, especially the U.S. Fed, would initiate and continue with a rate-cutting cycle and accommodative policy. “We were expecting yields to fall in 2024. Our conviction for the Indian market was even more strong in view of favourable demand-supply dynamics for G-Secs, driven by buoyant revenue collections and FPI inflows due to inclusion in the JP Morgan Global Bond Indices.” Portfolio duration across most schemes was increased to capitalise on these trends. “Given the narrow yield spread between corporate bonds and G-Secs, we increased our sovereign exposure, in line with the mandate of various schemes, which has outperformed the corporate bonds in the past one year. This strategy worked well for us and our schemes did well during the last year,” says Bamboli, who was placed third on the ranking of best debt fund managers this year.