SBI mutual fund, India’s biggest, goes long cash after jump in rates volatility

  • Some money managers turned wary of taking big positions in fixed-income in recent weeks, amid speculation that vaccine progress could add to inflationary pressure

Divya Patil and Subhadip Sircar (with inputs from Bloomberg)
First Published18 Mar 2021
The $63 billion asset manager has also been reducing duration in its debt funds.
The $63 billion asset manager has also been reducing duration in its debt funds.

The turmoil in bonds that’s recently roiled asset classes worldwide has prompted India’s biggest fund manager to hold more cash.

SBI Funds Management Pvt. is deploying funds in the overnight repo markets, Rajeev Radhakrishnan, head of fixed income, said in an interview earlier this week. The $63 billion asset manager has also been reducing duration in its debt funds.

The U.S. Treasury yield curve steepened after Federal Reserve Chair Jerome Powell stressed Wednesday that the central bank won’t raise interest rates until the U.S. economy shows tangible evidence it has fully healed from Covid-19.

Some money managers turned wary of taking big positions in fixed-income in recent weeks, amid speculation that vaccine progress could add to inflationary pressure. In India’s case, higher oil prices are a particular risk given the country relies heavily on imports. A record government borrowing program has also pushed up yields.

Bond yields have climbed in India

“In such a volatile situation, we’ll continue with this strategy and take our time to redeploy the cash,” Radhakrishnan said.

The shift was already underway earlier this year. The latest factsheet shows that SBI’s Dynamic Bond Fund’s cash holding rose to 32.5% as of the end of January, compared with 8.4% at the end of June.


Catch all the Mutual Fund news and updates on Live Mint. Download The Mint News App to get Daily Market Updates & Live Business News.MoreLess
HomeMutual FundsNewsSBI mutual fund, India’s biggest, goes long cash after jump in rates volatility

Most Active Stocks

Bharat Electronics

318.10
04:24 AM | 18 JUN 2024
8.55 (2.76%)

Tata Steel

183.25
04:23 AM | 18 JUN 2024
0.2 (0.11%)

State Bank Of India

850.00
04:24 AM | 18 JUN 2024
9.8 (1.17%)

Indian Oil Corporation

170.20
04:24 AM | 18 JUN 2024
-0.1 (-0.06%)
More Active Stocks

Market Snapshot

  • Top Gainers
  • Top Losers
  • 52 Week High

Mazagon Dock Shipbuilders

4,181.00
04:18 AM | 18 JUN 2024
306.35 (7.91%)

HFCL

126.85
04:18 AM | 18 JUN 2024
9.05 (7.68%)

HBL Power Systems

513.00
04:18 AM | 18 JUN 2024
35.4 (7.41%)

Cera Sanitaryware

8,151.05
04:14 AM | 18 JUN 2024
503.3 (6.58%)
More from Top Gainers

Recommended For You

    More Recommendations

    Gold Prices

    • 24K
    • 22K
    Bangalore
    73,519.00-431.00
    Chennai
    73,806.00646.00
    Delhi
    73,519.00-144.00
    Kolkata
    73,375.00359.00

    Fuel Price

    • Petrol
    • Diesel
    Bangalore
    102.86/L0.00
    Chennai
    100.75/L0.00
    Kolkata
    103.94/L0.00
    New Delhi
    94.72/L0.00

    Popular in Mutual Funds

      More From Popular in Mutual Funds
      OPEN IN APP
      HomeMarketsPremiumInstant LoanGet App