Kotak Corporate Bond Fund
This fund is about 10 years old, with a track record of steady returns from investing in a high-quality corporate bonds. Current average maturity of the fund is slightly below 3 years. It is placed in the income fund category, but given that the focus is on corporate bond-based accrual portfolio, it does not take high risk opportunistic-duration calls. This makes the fund returns less volatile as compared to the category.
Moreover, it is largely a AAA portfolio, which gives comfort on quality. In 2013-14 when financial markets world over were under stress, this fund too performed poorly. Two other years where performance was below average are 2009 and 2010, which were stress years for the Indian debt markets as the economy was in a rate-hike cycle. Other than that, the fund has been able to deliver between 8.5% and 9.5% annualised return over 9 years. In a positive rate cycle, returns have gone up to double digits of around 12-14% as well.
Again, this is a conservative fund meant for investors who want to park short- to medium-term money with little concern on credit quality and a steady return.
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