SBI Pension Fund Increases State Bond and Corporate Debt Allocation

SBI Pension Fund Pvt. is increasing its allocation to Indian state bonds and corporate debt as part of a carry-focused fixed-income strategy. Managing approximately $64 billion in assets, the fund is prioritizing steady income from higher-yielding securities over capital gains.

Chief Investment Officer Sandeep Pandey indicated the fund expects an increased supply of state bonds in the fourth quarter. To prepare for elevated yields following interest rate hikes by the Reserve Bank of India, the fund is reducing portfolio duration and increasing its cash holdings.

Beyond fixed income, the fund plans to expand its exposure to large-cap stocks. Equity investments currently comprise about a quarter of the total portfolio. Analysts suggest the fund's preference for state bonds may reduce demand for federal debt and potentially raise borrowing costs for corporations.