Debt markets look uncertain

Sashi Krishnan, Fund Manger, Chola Triple Ace

Fund Manager since February 1999

Investment style
The investment style has a clear bias towards safety. So much so that three of the bond funds of Chola MF are rated AAAf by CRISIL. These bond funds invest only in the highest rated corporate bonds/debentures and government securities. Credit risk is monitored continuously. By investing in rated companies with a high credit quality, a large portion of the liquidity risk associated with the debt portfolio is taken care of. The bias towards safety goes further to include prudent duration management through a clear and consistent view on future interest rate movements.

Current outlook
The debt markets continue to look very uncertain. Many of the macro variables do not appear to support any major revival in the markets. The only positive factor appears to be market liquidity but this too could be under threat with the managers of the economy hinting at monetary tightening to control inflation. Inflation itself is being driven by external factors like the increasing crude oil prices and global commodity prices. The scope for reigning in inflation therefore appears limited. Global interest rates also seem to be set to harden as the US Federal Reserve has been building a case for an upward revision in rates.

Who is your inspiration in the investment world?
Warren Buffett

Your favourite book
My favourite book is always the latest one I have read. At present it's The Goal by Eliyahu Goldratt.

Your favourite film
Munnabhai MBBS — if you go behind the laughs, it makes you sit up and think.

What do you do in your free time?
Catch up with the family.

If you hadn't been a fund manager, what would you have been?
Possibly would have liked to do something that involved travelling round the globe.

This article was originally published on October 28, 2004.