Mr. Prashant Pimple
Senior Fund Manager – Fixed Income
Prashant Pimple, Senior Fund Manager Fixed Income has been managing various debt funds since 2004. He has total of almost 12 years experience with Reliance Mutual fund managing duration, credit and balanced schemes. In his working career with Reliance Mutual Fund for last 12 years he has been instrumental and responsible for managing various category of funds successfully which has resulted in consistent and better performance of these schemes over the years. Over the years his experience and performance has resulted in confidence of investors in various schemes managed by him leading to some of the largest in its category fund AuMs. Prashant Pimple has been in Indian fixed income markets since 2000 having a rich and varied experience in Bank and Mutual Fund treasuries for last 17 years.
Q. On June 6th, RBI went ahead and hiked repo rates by 25 bps but has kept its stance neutral. What do you read from the situation and what are your observations on the RBI stance?
Answer: RBI has hiked the repo rate for the first time in four years and it was on expected lines. RBI has been prudent that growth continues to remain moderate and needs to pick up so it has maintained a neutral stance. Future stance will remain data dependent.
Q. What is going to determine the policy rate trajectory till August? How do you see the trend moving in short to medium term of say another 1-2 years?
Answer: Crude oil prices and developed market yields would be closely watched along with the monsoon progress and domestic data. Our view remains that RBI would gradually increase rates depending on the data. We expect 25-50bps of rate hikes over the next one year depending on the data.
Q. Again on the inflationary side, the projections have been hiked. How do you assess the situation on ground and what are your views on same going forward?
Answer: Inflation has been edging up due to higher crude prices and impact of revision in MSP prices in recent months. However our view is that it may remain within the RBI range as Monsoon progress is expected to be normal and well distributed along with government’s commitment on fiscal adherence. However the risks to the view remain rising crude and commodity prices.
Q. Is there any change in how you were approaching markets at the start of the calendar year and today?
Answer: Our approach has always been sticking to our investment strategy and aligning our portfolios as per the view and opportunities available in the markets.
Q. What has been your investment strategy - both on the duration side and credit side in the current markets?
Answer: We reduced duration in our duration funds when we felt yields were heading up and tactically added more when the yields were attractive. On the credit side, our approach has always been credit first and yields later which has been followed all the time.
Q. What would you advice to an investor looking to invest in debt funds for medium to long term? Where should he invest?
Answer: For investors looking to invest for medium to long term, depending on their risk profile they can look at investing in products at the short end of the curve(1-3 year segment). Accrual strategy continues to remain the preferred avenue currently and given the high absolute level of yields in the segment.