Leading Indian fund turns against riskier debt after Covid woes – –

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Leading Indian fund turns against riskier debt after Covid woes – –


A leading Indian fund manager is avoiding lower-rated rupee corporate bonds until the impact of the world’s worst Covid-19 crisis on weaker borrowers is better understood.
The level of stress in the economy, especially for small and medium-sized businesses, is still unclear after states have been locked down to curb the spread of a second wave of the virus from March, Dhawal Dalal said, which oversees $ 4.8 billion in debt assets at the Edelweiss Mutual Fund. . Dalal, who runs one of the top-performing debt funds last year, has only added AAA-rated corporate bonds to his portfolio since March.

“As the economy showed signs of recovery after the first wave of Covid-19, we asked investors to start considering non-AAA corporate bonds,” Dalal said in an interview last week. “But after the second wave, once again we came back to asking investors to be careful” until at least the second half of India’s fiscal year, starting in October, a- he declared.

Indian central bank at the start of the month lowered its forecast for economic growth and announced a series of new measures to support businesses, as new strains of the virus threaten recoveries in emerging and developed nations. Fixed income managers in India favored safer credit this quarter, with the additional spread that investors demand to hold BBB-rated ratings against their top-rated peers, near a 2005 high. in April.

Dalal’s Edelweiss Banking and PSU debt fund is the best performing among Indian mutual funds focused on these securities in the past year, returning 7.65% on its regular investment plan, according to data from the Association of Mutual Funds in India.

Learn more about India’s continued fight against Covid-19

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