SBI Dynamic Bond Fund
In today’s financial climate, rising inflation and declining GDP growth rate remains the biggest challenge which brings about uncertainty and ambiguity in the future course of interest rate movement. However, with the recent stance of RBI in terms of the policy measures it becomes quite clear that there would not be any further rise in the key policy rates. With immense confidence one can say that the interest rates have reached its peak and are headed in the downward direction but the question that still bothers is when will RBI reduce the rates further? Such volatile conditions calls for an actively managed portfolio which has the inherent investment objective and potential to take optimum advantage of the opportunities arising in the financial domain by keeping a track of the interest rate movements and shuffling the portfolio likewise in order to provide better and superior returns to investors. Dynamic Bond Funds offer very good prospect in the current situation as they enjoy the flexibility to allocate across diverse debt instruments with commensurate duration thus circumventing the risk arising out of current market position. SBI Dynamic Bond Fund in the last three years have been a top quartile performer by dynamically managing the maturity profile in both the scenario of rising and falling interest rates and has consistently outperformed the category funds and its benchmark index generating superlative returns and thus proving to be an upbeat investment option.
SBI Dynamic Bond Fund (SDBF), launched in January 2004, has surprised with its splendid performance over the last three years even after languishing at the bottom till 2009. The fund with active duration management has been able to quickly re-position the maturity profile of the portfolio to suit the changing interest rate environment. The fund with its flexible approach has prudently played well with the current volatile markets, making astute calls on credit spreads by investing across different asset types in the debt market. The fund has proactively allocated funds between Certificate of Deposits, Commercial Papers, Corporate Bonds, G-Secs and Cash by making the most out of trading opportunities arising from time to time in order to deliver out-performance The fund has generated return of 8.41% CAGR over the last 3 years, outperforming the category average and benchmark by whopping 192 and 235 bps respectively.