Bharti AXA to launch two fixed income funds

Sujoy Kumar Das, Head-Fixed Income, Bharti AXA Invst Managers said that the company will launch two fixed income funds; one is the Bharti AXA Liquid fund and Bharti AXA Treasury Plus Fund. These two funds are positioned on the shorter end of the yield curve, Das said.

According to Das, it is ideal for investors, who are in corporate treasuries and HNIs who would like to use these products primarily for the management for the cash reserve surpluses.

Excerpts from CNBC-TV18's exclusive interview with Sujoy Kumar Das:

Q:  We understand that you are launching a new product very soon, take us through that product and also the fact that if it is a fixed income product, the prospects immediately don’t look very good for guilt’s, and the expectations is that the tenure could touch 10% very soon, your views on that and as well your new product?

A: To start off, we are launching two fixed income funds; one is the Bharti Axa Liquid fund and Bharti Axa Treasury Plus fund. These two funds are positioned on the shorter end of the yield curve. It is ideal for investors, who are like in corporate treasuries and HNIs who would like to use these products primarily for the management for the cash reserve surpluses. What we intend to do in terms of positioning and structuring of the portfolio in these two funds is that the interest rate duration of both these funds are going to be extremely short. In the first one it could be anywhere between 2-3 months and in the second one it would be anywhere between 3-4 months. The idea is that, in this regime of a rising interest rate scenario, what is important is that to control your interest rate duration and keep a very high stress on credit quality. So these two funds are going to score on that. So in these two funds we are, not going to take any undue credit calls and also we aren’t going to take any interest rate calls.

Q2: What are you expecting by way of a post tax annualized return from these funds?

A: These two funds would be in a position to give a return marginally higher than the risk free rate, in the 3-4 month category which is there in the present market scenario, what we witness and expect in the market is that interest rates are expected to go up at least till the period of November-December of this year and in a shorter interest1 rate duration, these two funds would be in a position to give a market relative return during this scenario.

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