India’s fund managers turn to fixed income as rate cycle shifts
AI Summary
The renewed interest in fixed income among Indian investors reflects a strategic shift as rising yields present attractive entry points, particularly in corporate bonds. However, the caution expressed by fund managers about market timing and the structural issues in India's corporate bond market highlights the importance of a long-term investment horizon and proper asset allocation for retail investors. As the market evolves, those considering fixed income should be aware of both the potential for stable returns and the inherent risks associated with lower-rated bonds.
Fixed income is gaining renewed attention among Indian investors as rising yields and strong corporate credit create a more favourable entry point, according to fund managers speaking at the Morningstar Investment Conference 2026.
The 10-year government bond yield has climbed from 6.15 per cent in June 2025 to around 7.18 per cent, while the rupee trades at 96–97 against the dollar. Devang Shah, Head of Fixed Income at Axis Mutual Fund, said entry levels are “very, very good,” though investors may not see capital gains in the near six months. He advised adding duration once the first rate hikes are in, unless the cycle turns deeper than expected.
Original Article
Published on Hindu BusinessLine
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