With a mix of the right strategies and calculated risks, Delhi-based Escorts Mutual Fund, or EMF, has turned in a performance that enabled it to bag the Best Bond Fund House Award this year. The fund house currently runs five debt schemes - Liquid Plan, Gilt Plan, Floating Rate Fund, Income Bond and Income Plan.
Floaters and liquid funds suit investors who want to park their money for a few months while income and gilt funds are ideal for investors seeking long-term capital growth. "Selection of papers is crucial to both of them," says Sanjay Arora, Chief Investment Officer, EMF.
The challenge is to give above category returns during a high interest rate regime, he adds. "Our job is to identify companies where perceived risk is different from actual risk." Besides rigorous pre-investment assessment, EMF uses a strategy to invest in companies where credit ratings are likely to improve. "Typically, when the rating improves, the yield goes down and the value of paper increases which results in capital appreciation," he adds.