Investment mantra: To optimise risk-adjusted returns by investing in a high-credit portfolio while managing interest rate risk and minimising liquidity risk.
Best call over the past few months: Holding a high proportion of cash equivalents and not investing in real estate and asset-backed securities.
Worst call over the past few months: Not being able to capture the rally in the bond markets to the desired extent since we did not expect RBI to be so aggressive in cutting rates.
Top picks right now: To continue to hold high cash equivalents in money market funds and long duration in bond funds.
View on interest rates: We expect policy rates to drop and the repo rate to be 6% the next year.
Debt funds to be recommended: Investors should invest in bond/gilt funds with at least a one-year view. As interest rates fall, bond prices appreciate, yielding better returns for investors.
Advice to small investors: Give importance to SLR—safety (credit), liquidity and returns—during the current uncertain times. Stick to your asset allocation through various market cycles.
— Nandkumar Surti is CIO, Fixed Income, JP Morgan Mutual Fund