Pru-ICICI Income Plan's Fund Manager, Sanjay Garodia on his Investment Strategy

Prudential-ICICI Income Plan has emerged as the biggest open-end bond fund in the Indian fund industry, in less than three years since launch. With assets under management at nearly Rs 2300 crore, the fund has delivered an impressive return of 12.79% since launch. Managing a large sized bond fund is normally perceived to be a tough task, especially considering the illiquid Indian debt markets. Yet, fund manager Sanjay Garodia believes that there a number of advantages, which come with a large income fund. Q.Over time, Prudential Income (PIIF) has emerged to be the largest sized open-end debt fund. What are the benefits and problems faced in managing a large debt fund? SG:There is a huge benefit in having a large debt fund. The primary advantage is in terms of sourcing of bonds. Having large fund results in dis-intermediation in a large way, i.e. number of issuers' come directly to us and hence we get better rates in investment of assets. The size also results in more information sharing by the intermediaries and brokers. Size enables us to pick up large ticket deals, which otherwise would go to a trader who in turn down sells at a profit. Having a large fund enables better cash management. The total amount in cash and call can be brought down to a smaller percentage of total assets. It has helped us to launch lot of retail friendly services like Insta-Cheque. Till date, we have no