These are interesting times. We have seen the worst growth contraction in decades but interest rates still remains higher than lows seen during other crisis.

1. FIXED INCOMEUPDATE
Nov 2020
Fixed Income Update
Macro Update
* Change in basis points (bps) Data Source – RBI, Mospi.Nic.in, CRISIL Fixed Income Database, LAF – Liquidity Adjustment Facility, MSF – Marginal Standing Facility,
SLF – Standing Liquidity Facility, CP - Commercial Paper, CD – Certificateof Deposit, CB – Corporate Bond, IIP – India Industrial Production, CPI – Consumer Price Index,
WPI – Wholesale Price Index, CAD – Current Account Deficit, GDP – Gross Domestic Product
Interbank call money rates stayed below the RBI’s repo rate of 4% in
October owing to comfortable liquidity in the system.
Currency in circulationrose 20.3% on-year in the week ended October
23, 2020, compared with15.1% growth a year ago. The RBI, via its
liquidity window, absorbed Rs4100.81 billionona net daily average
basis in October 2020, compared withnet liquidity absorptionofRs
3313.23 billioninSeptember 2020.
Bank credit growth rose 5.7% on-year in the fortnight ended October 9,
2020, compared with 5.3% on-year growth reported in the fortnight
ended September 11, 2020.
Source: CRISIL, data as on Oct 31, 2020
Average Liquidity Support by RBI
Rs -4100.81 billion (Includes: LAF, MSF, SLF & Term Repo)*
Bank Credit Growth Bank Deposit Growth
5.7% 10.5%
Money Market
Tenure CD Change* CP Change*
1M 3.17 -8 3.27 -28
3M 3.20 -10 3.35 -20
6M 3.48 -7 3.83 -17
12M 3.75 -14 4.25 -45
Bond Market
Tenure G-Sec Change* AAA CB Change*
1Y 3.47 -23 3.85 -45
3Y 4.63 -33 4.95 -38
5Y 5.17 -23 5.60 -55
10Y 5.88 -13 6.62 -28
Macro Economy Data Release
Indicator Latest Update Previous Update
IIP -8.0% (August) -10.8% (July)
GDP -23.9% (1QFY21) 3.1% (4QFY20)
USD/INR 74.10 (October) 73.76 (September)
WPI 1.32% (September) 0.16% (August)
CPI 7.34% (September) 6.69% (August)
Credit Spread Data in basis points
Tenure AAA AA A
1Y 0.5% 0.98% 1.54%
3Y 0.22% 0.77% 1.66%
5Y 0.32% 0.95% 1.97%
10Y 0.45% 1.20% 2.25%
Data Source – RBI, Mospi.Nic.in, CRISIL Fixed Income Database ;LAF-Liquidity
Adjustment Facility, MSF – Marginal Standing Facility, SLF – Standing Liquidity Facility,
CP - Commercial Paper, CD – Certificate of Deposit, CB – Corporate Bond, IIP – India
Industrial Production, CPI – Consumer Price Index, WPI – Wholesale Price Index,
CAD – Current Account Deficit, GDP – Gross Domestic Product
Source: CRISIL, data as on Oct 31, 2020
CRU DE: London Brent crude oil prices declined 11.4% in October
to close at $37.46 per barrels on 30th day of the month vis-à-vis
$42.3 per barrel on September 30, 2020 on the International
Petroleum Exchange (IPE). Oil prices witnessed downward
momentum through most of the month mainly due to demand
growth concerns induced by a relentless spike in Covid-19 cases
across the globe and reports that the Organization of the
Petroleum Exporting Countries (OPEC) and its allies failed to
decide on production-cut targets. However, some losses were cut
short by supply concerns aid threat of tropical Storm Zeta and
Hurricane Delta.
IN FLATION: Retail inflation based on the Consumer Price Index
(CPI) rose to 7.34% in September – the highest so far in the fiscal,
compared with 6.69% in August.
CU RRENCY: The rupee settled at Rs 73.76 against the dollar on
September 30, compared with Rs 73.60 on August 31.
The rupee weakened against the US dollar, settling at Rs 74.10 per
dollar on October 29 compared with Rs 73.76 per dollar on
September 30.
GILTS: Gilts ended higher in October with the yield on the 10-year
benchmark 5.77% 2030 paper settling at 5.88% on October 29,
2020 compared with 6.01% on September 30, 2020.

2. Our Outlook
Gilts prices ended higher in October with the yield on the 10-year benchmark 5.77% 2030 paper settling at 5.88% on October 29, 2020
compared with 6.01% on September 30,2020.
In its October meeting, the MPC members unanimously opted to keep the policy interest rates on hold. The status quo on rates was guided
by stubborn headline inflation, which continues to surprise on the upside. It has remained above the upper end of the RBI’s target band of
2-6% for five consecutive months.
Though the policy interestrates were kept on hold,the banking regulator made a number ofbond market-supportive announcements, like:
1.Increasing the quantum ofliquidityinfusion into the market,via special open marketoperations (OMOs) and outrightbond purchases
2.Announcing Rs1tn of on-tap TLTROs
3.Conducting OMOs in state developments bonds (SDLs) as a special case during the currentfinancial year.
4.In addition, the RBI extended the dispensation of the enhanced held-to-maturity limit of 22% up to March 31, 2022, for securities acquired
between September 1,2020 and March 31, 2021.
All these measures are supportive of bond yields and may help to prevent any near term spike in yields. Clearly, the longer end of the yield
curve may benefitfrom RBI’s measures announced.
The MPC members were more dovish than before and favoured forward guidance on accommodative conditions to anchor market
expectations of liquidity. This along with purchase of government securities, though has led to some reduction in term premium, they still
remain at elevated levels with spreads between the 1 year and 10 year government security at above 200bps. Inflation is expected to ease
as supply restrictions are removed. Demand conditions, however, continue to remain weak and warrant both monetary and fiscal support.
Thus the near term looks bullish for bond markets as the RBI is expected to keep interest rates low. However, as communicated earlier, the
pace of rate cuts is expected to reduce and the focus of monetarypolicy is likely to shifttowards liquidityand financial stability.
The corporate bond markets continue to see flight to safety as AAA corporate bond yields cool off with yields close to sovereign securities
while the AA and below space, though saw moderate softening of yields, still trade at elevated levels. Hence, the non AAA corporate bond
space may have some pockets that offer better carry and adequate margin of safety to investors. RBI’s has taken measures to boost credit
growth like increasing the regulatory limits for retail lending (eligible for lower risk weight of 75%) from Rs 5 Crs to Rs7.5 Crs. This may help
transmission ofrates to spread assets and lead to cooling off of yields.
Clearly, based on the above scenario i.e. high term premium and favorable credit spread, we are positive on short to medium duration
schemes, as they may provide better carry due to steepness in the yield curve and spread assets (AA Corporate bonds) which may benefit
from better accrual income. We believe that going forward, accrual income shall be a significant component of the return of bond investors
and returns from capital appreciation maytake a back seat.
Finally, these are interesting times; we have seen the worst growth contraction in decades but interest rates still remains higher than lows
seen during other crisis. We are witnessing 1 month CD collapsing below repo but some of the good quality AA rated corporate bonds still
trades at elevated yields. Even post RBI aggressive rate cuts, we are still witnessing the steepest yield curves seen in India’s history. We
remain positive on the bond markets. A good strategy may be to create a portfolio with maturity in the range of 2-5 years along with
accumulating spread assets to give better carry to the portfolio. Having said that, we remain cognizant of managing the liquidity,
concentration, credit and duration in our accrual portfolios to provide investor with better risk adjusted returns. We recommend investors
with an appetite for volatility to invest in Dynamic Duration Scheme.
Data Source:RBI, CCER
Debt Valuation Index considers WPI, CPI, Sensex YEAR-ON-YEAR returns, Gold YEAR-ON-YEAR returns and Real estate YEAR-ON-YEAR returns over G-Sec yield, Current
Account Balance and Crude Oil Movement for calculation.
Debt ValuationIndex

3. Our Recommendation
Our Recommendations
Cash
Management
Schemes
ICICI Prudential Floating Interest Fund (An open ended debt scheme predominantly investing in
floating rate instruments (including fixed rate instruments converted to floating rate exposures
using swaps/derivatives)
ICICI Prudential Ultra Short Term Fund (An open ended ultra-short term debt scheme investing
in instruments such that the Macaulay duration of the portfolio is between 3 months and 6
months)
ICICI Prudential Savings Fund (An open ended low duration debt scheme investing in
instruments such that the Macaulay duration of the portfolio is between 6 months and 12
months.)
These schemes aim
to benefit from
better risk adjusted
returns
Shorter
Investment
horizon
Scheme
ICICI Prudential Short Term Fund (An open ended short term debt scheme investing in instru-
ments such that the Macaulay duration of the portfolio is between 1 Year and 3 Years)
ICICI Prudential Banking & PSU Debt Fund (An open ended debt scheme predominantly
investing in Debt instruments of banks, Public Sector Undertakings, Public Financial Institutions
and Munici- pal Bonds)
ICICI Prudential Corporate Bond Fund (An open ended debt scheme predominantly investing in
AA+ and above rated corporate bonds.)
These schemes
aim to benefit
from mitigating
interest rate
volatility
Accrual
Schemes
ICICI Prudential Medium Term Bond Fund (An open ended medium term debt scheme investing
in instruments such that the Macaulay duration of the portfolio is between 3 Years and 4 Years.
The Macaulay duration of the portfolio is 1 Year to 4 years under anticipated adverse situation)
ICICI Prudential Credit Risk Fund (An open ended debt scheme predominantly investing in AA
and below rated corporate bonds)
These schemes
aim to benefit
from capturing
yields at elevated
levels.
Dynamic
Duration
Scheme
ICICI Prudential All Seasons Bond Fund (Anopen ended dynamic debt scheme investing across
duration)
This scheme aim to
benefits from
volatility by actively
managing duration.
Riskometers
ICICI Prudential Ultra Short Term Fund is suitable for investors who are seeking*:
Moderate
LOW HIGH
Investors understand that their
principal will be at Moderate risk
• Short term regular income
• An open ended ultra-short term debt scheme investing in a range of debt and money
market instruments
*Investors should consult their financialadvisors if indoubt about whether theproduct issuitable for them.
ICICI Prudential Savings Fund is suitable for investors who are seeking*:
Moderate
• Short term savings
• An open ended low duration debt scheme that aims to maximize income by investing in
debt and money market instruments while maintaining optimum balance of yield, safety
and liquidity
LOW HIGH
Investors understand that their
principal will be at Moderately Low
risk
*Investors should consult their financialadvisors if indoubt about whether theproduct issuitable for them.
None of the aforesaid recommendations are based on any assumptions. These are purely for reference and the investors are requested to consult their financial advisors
before investing.
Note: The Macaulay duration is the weighted average term to maturity of the cash flows from a bond. The weight of each cash flow is determined by dividing the present
value of the cash flow by the price.

4. Riskometers
ICICI Prudential Short Term Fund is suitable for investors who are seeking*:
Moderate
LOW HIGH
Investors understand that their
principal will be at Moderate risk
• Short term income generation and capital appreciation solution
• A debt fund that aims to generate income by investing in a range of debt and money
market instruments of various maturities
*Investors should consult their financialadvisors if indoubt about whether theproduct issuitable for them.
ICICI Prudential Medium Term Bond Fund is suitable for investors who are seeking*:
Moderate
LOW HIGH
Investors understand that their
principal will be at Moderate risk
• Medium term savings
• A debt scheme that invests in debt and money market instruments with a view to
maximize income while maintaining optimum balance of yield, safety and liquidity
*Investors should consult their financialadvisors if indoubt about whether theproduct issuitable for them.
ICICI Prudential All Seasons Bond Fund is suitable for investors who are seeking*:
Moderate
LOW HIGH
Investors understand that their
principal will be at Moderate risk
• All duration savings
• A debt scheme that invests in debt and money market instruments with a view to
maximize income while maintaining optimum balance of yield, safety and liquidity
*Investors should consult their financialadvisors if indoubt about whether theproduct issuitable for them.
ICICI Prudential Corporate Bond Fund is suitable for investors who are seeking*:
Moderate
LOW HIGH
Investors understand that their
principal will be at Moderate risk
• Short term savings
• An open ended debt scheme predominantly investing in highest rated corporate bonds
*Investors should consult their financialadvisors if indoubt about whether theproduct issuitable for them.
ICICI Prudential Credit Risk Fund is suitable for investors who are seeking*:
Moderate
LOW HIGH
Investors understand that their
principal will be at Moderate risk
• Medium term savings
• A debt scheme that aims to generate income through investing predominantly in AA and
below rated corporate bonds while maintaining the optimum balance of yield, safety and
liquidity
*Investors should consult their financialadvisors if indoubt about whether theproduct issuitable for them.
ICICI Prudential Floating Interest Fund is suitable for investors who are seeking*:
Moderate
LOW HIGH
Investors understand that their
principal will be at Moderate risk
• Short term savings
• An open ended debt scheme predominantly investing in floating rate instruments
*Investors should consult their financialadvisors if indoubt about whether theproduct issuitable for them.

5. ICICI Prudential Banking & PSU Debt Fund is suitable for investors who are seeking*:
Moderate
LOW HIGH
Investors understand that their
principal will be at Moderate risk
• Short term savings
• An open ended debt scheme predominantly investing in Debt instruments of banks,
Public Sector Undertakings, Public Financial Institutions and Municipal Bonds
*Investors should consult their financialadvisors if indoubt about whether theproduct issuitable for them.
Mutual Fund investments aresubject to market risks, read all schemerelated documents carefully.
In preparation of the material contained in this document, ICICI Prudential Asset Management Company Limited (the AMC) has used
information that is publicly available, including information developed in-house. Some of the material used in the document may have
been obtained from members/persons other than the AMC and/or its affiliates and which may have been made available to the AMC
and/or to its affiliates. Information gathered and material used in this document is believed to be from reliable sources. The AMC,
however, does not warrant the accuracy, reasonableness and / or completeness of any information. We have included statements /
opinions / recommendations in this document, which contain words, or phrases such as “will”, “expect”, “should”, “believe” and similar
expressions or variations of such expressions that are “forward looking statements”. Actual results may differ materially from those
suggested by the forward looking statements due to risk or uncertainties associated with our expectations with respect to, but not
limited to, exposure to market risks, general economic and political conditions in India and other countries globally, which have an
impact on our services and / or investments, the monetary and interest policies of India, inflation, deflation, unanticipated turbulence in
interest rates, foreign exchange rates, equity prices or other rates or prices etc. The AMC (including its affiliates), the Mutual Fund, the
trust and any of its officers, directors, personnel and employees, shall not be liable for any loss, damage of any nature, including but not
limited to direct, indirect, punitive, special, exemplary, consequential, as also any loss of profit in any way arising from the use of this
material in any manner. The recipient alone shall be fully responsible/are liable for any decision taken on this material. All figures and
other data given in this document are dated and the same may or may not be relevant in future. The information contained herein should
not be construed as a forecast or promise nor should it be considered as an investment advice. Investors are advised to consult their
own legal, tax and financial advisors to determine possible tax, legal and other financial implication or consequence of subscribing to
the units of ICICI Prudential Mutual Fund. The sector(s)/stock(s) mentioned in this communication do not constitute any recommenda-
tion of the same and ICICI PrudentialMutualFundmayor may not have any future position in these sector(s)/stock(s). Past performance
may or may not be sustained in the future. The portfolio of the scheme is subject to changes within the provisions of the Scheme
Information document of the scheme. Please refer to the SID for more details.
The information contained herein is only for the purpose of information and not for distribution and do not constitute an offer to buy or
sell or solicitation of any offer to buy or sell any securities or financial instruments in the United States of America ("US") and/or Canada
or for the benefit of US persons (being persons falling within the definition of the term "US Person" under the US Securities Act, 1933,
as amended) or persons residing in Canada.
Disclaimer