Key Points
Fixed-income investors could buy mutual fund debt schemes that bet on medium and long-term bonds in a staggered manner as fund managers believe interest rates have peaked with the Reserve Bank of India on an extended pause in its monetary policy stance...
Fund managers believe this strategy gives investors the chance to earn a high carry and capital appreciation on their long-duration bonds as and when the RBI cuts rates later next year...
Debt funds that invest in medium and long-term bonds include categories like corporate bond funds, banking and PSU debt funds, long-term funds and gilt funds...
"Given the fact that India's growth is pretty robust with inflation also under control, RBI is likely to be on long pause," said Puneet Pal, head-fixed income at PGIM India Mutual Fund...
"Investors may look at the 2 to 5 years segment as their core allocation as it provides an opportunity to capture prevailing high yields while getting less impacted by the volatility at the longer end," said Vikas Garg, head-fixed Income at Invesco Mutual Fund...
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