Tata AMC announces restructuring of Tata Corporate Bond Fund

Tata Mutual Fund has announced the restructuring of Tata Corporate Bond Fund. According to fund house, the new portfolio strategy of the fund would be to keep a short average maturity to limit the interest rate risk.

“With interest rate policy stance changing to neutral from accommodative, yields will have stable to rising bias. In such environment, Tata Corporate Bond Fund is positioned around lower duration spectrum with focus on accrual as well as credit quality,” Amit Somani, Fund Manager, Tata Corporate Bond Fund, said. He added that the fund would generate accruals by taking exposure to short-term corporate bonds of high quality issuers.

However, the AMC said that the strategy is based on the fund manager's current outlook and it can change in future. “As the maturity of the portfolio is lower, it would benefit investors in a rising interest rate scenario,” said, Murthy Nagarajan, Head-Fixed Income, Tata Asset Management.


The bond fund currently invests 80-100 per cent in corporate debt across maturities and ratings, 0- 20 per cent in other money market instruments. The fund does not invest in government securities. The fund has returned 7.42 per cent in the last one year, 8.13 per cent in three years and 8.46 per cent in five years.