In a category where most funds pride themselves on actively managing both duration and credit, this fund takes a more passive approach to earn higher yields. It relies mainly on accrual rather than duration calls to make its returns. Having said this, the fund's view on interest rates is bullish and it expects benign global demand conditions and lower prices of crude oil and commodities to support lower inflation. It believes there is scope for a further fall in interest rates.

This is a consistent performer in the income category, beating both its benchmark and category in eight of the last ten years. The underperformance has mainly come during the most bullish phases in the rate cycle and reflects the fund's low portfolio maturity. Average maturity has fluctuated a bit over the years, moving up from under one year until mid-2014 to about three-four years now. However, this could be a function of new inflows rather than active duration bets by the manager.

While the fund's returns since launch are muted at 7.6 per cent, the five-year record, at 9.5 per cent, is among the best in the category. Asset size is a constraint as the fund's average assets have hovered between R20 crore and R200 crore in the last three years. Fluctuating size can force unnecessary churn in the portfolio, which can be difficult to deal with in the less-liquid corporate bond segment. While portfolio yield to maturity is high at 10.2 per cent (April 2015), the small size translates into a not-so-economical expense ratio of 1.38 per cent.