This could be a good time for mutual fund investors to look at medium-term debt funds, given the 50-basis-points rate hike by the RBI on Friday.
The markets, in the build up to the policy, had expected a rather dovish stance, and yields across the board cooled off ahead of the policy. The half-a-percentage hike caught participants off guard, resulting in the 10-year government securities retracing past gains almost completely. The benchmark 10-year paper traded at 7.30%, up around 15 bps compared to Thursday.
