For decades, large corporates and multinational companies have been sourcing their funds from the public to fuel their operations. While it started with issuing petty stocks, with time the fundraising has taken new shape. Today, companies have numerous of sourcing funds which includes corporate bonds – one of the forms of debt securities.
However, with increasing awareness people have shifted their focus towards mutual fund investing, rather than sticking to plain old stock buying. SBI Corporate Bond Fund acts as an important medium between these corporates and the investors to fulfil their respective needs. Through this fund, the corporates can reach out to public demanding more capital for their operations, and on the other hand, the public can too conquer their investment endeavours by investing in this fund.
There’s a lot more to know about this fund. So, keep reading folks!
The Fund Snapshot
SBI Corporate Bond Fund – Regular Plan is the latest entry in the product regime of SBI Mutual Fund – one of the most powerful and highly regarded asset management companies in India. The fund belongs to the debt corporate bond category, where a larger exposure has been given to corporate bonds with some inclusion of money market instruments.
The objective of SBI Credit Risk Fund Growth is to avail the investors a platform where they could seize the opportunity to invest in corporate bonds of AA+ and higher grades. In addition to it, the fund also strives to maintain a reasonable amount of liquidity in the portfolio by adding money market instruments in appropriate measures.
The Portfolio Construction
In order to create a safe haven for the risk averse community of investors, the fund managers of SBI Corporate Bond Fund have kept keen focus on top debt securities and money market instruments. They have devised the portfolio in such a way that it could provide reasonable returns without getting exposed to high risks. Let’s take a closer look at the portfolio construction through the table below:
As it can be seen from the table above, AAA debentures – both convertible and non-convertible – have been given the biggest space in the portfolio. These debentures pertain to different corporates operating in different industries. The top 5 holdings that together form the portfolio are as follows: –
The Fund’s Strategy
SBI Credit Risk Bond Fund operates on a crucial investment strategy that involves significant credit risk in order to generate appreciable profits. The fund managers invest the assets across industries by applying the bottom-up investment strategy in a combination with qualitative measures to filter the risk. This approach also helps in eliminating excessive deceleration of profits.
Despite the volatile market scenario, the fund managers have stayed loyal to the bottom-up strategy of investment. They have successfully plotted the fund’s future movements by undertaking the prospective market movements, thereby polishing the chances of high growth in the future. The risk-management authority of the fund has also devised some strong guidelines which are required to be adhered to ensure healthy growth of the portfolio.
The Investment Pathway
Buying a stake in SBI Credit Risk Fund (Growth) is quite affordable. Since the fund has been just launched, the NAV is yet to achieve a higher amount and is currently floating at ₹10.12, as recorded on 8th March 2019. You can start investing in the fund by opting for an SIP plan starting at just ₹1000 a month, however, after making an initial investment of ₹5000 in the fund.
SBI Corporate Bond Fund – Regular Plan (G) is a good option for the risk averse clan of investors. It contains moderate risk exposure and can be availed for long-term investment goals. Since the fund imposes an exit load on redemption made within 180 days, it is advisable that the investors plan a long-term investment with this fund in order to enjoy a hassle-free investment journey.
SBI Credit Risk Bond Fund is the latest addition in the product family of SBI Mutual Fund. The fund mainly focuses on AAA and above category instruments to create a safe yet energised portfolio, and also strives for money market instruments to attain liquidity. Investors having a small risk appetite can proceed with an investment in this fund to achieve their financial aspirations.