The Reserve Bank of India (RBI) in its Monetary Policy Committee (MPC) meeting on Friday kept the repo rate unchanged at 4%. The central bank also decided to continue with the accommodative stance.
Fund managers feel that short duration debt schemes will find better traction under current atmosphere.
"Money market funds investing primarily in high credit quality money market instruments of up to 1 year along with other similar category funds may attract more attention from investors," said Mahendra Jajoo, CIO, fixed income, Mirae Asset Investment Managers.
Sandeep Bangla, CEO, Trust MF said that there is a possibility that yields at the longer end (10 years) will inch up towards 6.5% gradually. "Investors should invest in bond funds with less than 3 years maturity to minimize interest rate risk,” he said.
PGIM India MF's CIO-Fixed Income, Kumaresh Ramakrishnan said his fund house would continue to recommend investors to look at all season categories like Banking & PSU, corporate bond and dynamic bond funds.
