ICICI Prudential AMC Transitions from Sovereign Bonds to Corporate Debt Amid Changing Debt Markets
ICICI Prudential AMC Adjusts Bond Holdings
ICICI Prudential Asset Management Co. is restructuring its approach to debt markets by reallocating resources from sovereign bonds to corporate debt. Manish Banthia, the chief investment officer for fixed income, noted that corporate bonds with one- to three-year maturity hold appeal due to the lower risk associated with many corporates having deleveraged. He emphasized that the current state of sovereign debt appears overvalued, which offers limited returns in the medium term.
Market Trends and Asset Managers' Perspectives
In light of India's recent entry into a global bond index, demand for Indian assets has surged. Asset managers are keenly observing the fluctuations in interest rates set by the central bank, considering their investment strategies. Banthia's fund, known for its performance, has shifted its holdings, decreasing sovereign bonds from 61.1% to 55.6% while increasing corporate debt from 28.9% to 33.5%.
Demand for Indian Corporate Debt
Many companies are opting to raise funds through debt markets and IPOs, reflecting a shift from reliance on bank loans. The appeal of robust interest rates is aiding in managing debt levels and credit risks effectively.
The Outlook for Future Investments
As the Federal Reserve remains poised to adjust interest rates, the appeal for higher-yielding assets continues to grow. Banthia cautioned, however, that while investor momentum seems positive, the fixed-income market values present more risk than return at this juncture.
This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.