ICICI Prudential Sadvings Fund's 75-80% exposure is in AAA-rated securities

Rohan Maru is the lead manager of the fund and he started managing it in September 2013. Maru has eight years of experience in the daily cash management and liquidity analysis of fixed income funds.

Rahul Goswami continues as co-manager. His role here involves overseeing the investment process and contributing to a macroeconomic view.

The fund employs an investment process that's focused on safety, liquidity and returns. The managers seek to add value through security selection rather than making big adjustments to the fund's duration. They begin their investment process by combining both top-down macroeconomic analysis of the interest rate and yield curve, as well as the bottom-up credit research focusing on undervalued securities and sectors. The investment team approves the coverage list with a strong focus on company management and its track record, the financial strength of the promoter group and corporate governance standards.

Meetings with the management are followed by quantitative analysis where the focus is to get a measure of the company's cash flow and relevant ratios – leverage, coverage, and solvency. The team also uses the ratings issued by the agencies as benchmarks to corroborate its internal ratings. At this step, the team draws on the expertise of its equity counterparts.

For this fund, the managers discuss quarterly strategies (roughly in line with the fund's average maturity) based on a combination of factors such as the macroeconomic scenario, liquidity conditions, spreads and short-term influencing factors such as overnight rates, inflation and money supply, among others. This, in turn, determines the fund's asset-allocation and maturity profile.

The managers continue to run the strategy with low duration. They focus on higher accrual income while keeping a 75-80% exposure in AAA-rated securities. The portfolio duration is maintained within six to 12 months, but the managers don't restrict themselves looking for tactical opportunities that can benefit from likely yield-curve movement.

ICICI Bank