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Move to shorter-duration debt funds

Frequency, magnitude of rate cuts will be slow, going forward. Investors should be happy with lower returns

Tinesh Bhasin  |  Mumbai 

While there are expectations of further rate cuts in the future, investors should start moving their debt investments to funds that maintain an average portfolio maturity of less than four-five years. “We are nearing the end of the downward interest rate cycle. Longer term funds won’t be as attractive as they have been until now,” says R Sivakumar, head of fixed income at Axis Mutual Fund.

While the Reserve Bank of India kept rates unchanged on Tuesday, it has already cut rates by 150 basis points (bps) since 2015. Fund managers say while rates might come down further, they ...

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First Published: Tue, August 09 2016. 22:40 IST

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