UTI Corporate Bond Fund attempts to capture the ongoing yields by following a ‘buy and hold’ investment style to generate accrual income. The scheme would invest high credit quality instruments (min. 80% investment in AAA &AA+ rated instruments) with a maturity of 3 to 4 years to lock in the prevailing yields.
SudhirAgrawal, Fund Manager, UTI AMC said, “Lowering crude oil prices and appointment of new RBI governor who is perceived to have a dovish bent led to softening of yields. The sustainability of downward trajectory would be dependent on various factors viz. crude oil price movement, inflation prints, outcome of election etc. We believe there would be populist measures in coming months which might have an impact on the fiscal. Whether the government is able to stick to the path of fiscal prudence or not would be key in driving the yields in near term. We expect shallow rate cuts by RBI but it would not be start of an easing cycle. Insuch a scenario, fundlike UTI Corporate Bond Fund having the ability to capture the prevailing yield provides a good investment opportunity.”
Investors who want to build their core debt portfolio for the medium term (3 years+) investment horizon may look to invest this fund.