Invest in Indian fixed income for better yields

Saurav Ghosh, a fixed income expert, suggests that now is an ideal time to invest in Indian fixed income. He points out the global economic uncertainties and volatility in equity markets, making Indian fixed income a stable choice for investors. Ghosh highlights opportunities in longer-duration government securities and corporate bonds. He believes these investments could be particularly attractive as the Reserve Bank of India (RBI) may soon cut interest rates. This could lead to better yields for investors who lock in rates now. For those looking for flexibility, Ghosh recommends dynamic bond funds. These allow managers to adjust portfolios in response to changing interest rates. He also advises investing in AAA and AA-rated corporate bonds with a duration of 24-36 months for moderate risk investors. On the short-term side, Ghosh mentions that money market yields are currently high, making shorter-duration G-Secs and State Development Loans appealing. He notes that the RBI's recent liquidity infusion is expected to help lower these short-term yields in the future. Ghosh observes that domestic and global bond markets are closely linked, but the difference in yields between US and Indian bonds has narrowed significantly. He mentions that Foreign Portfolio Investors (FPIs) have been pulling back due to currency fluctuations, but that could change if the US Federal Reserve starts lowering rates. He also indicates that recent market movements could redirect investment flows toward emerging markets like India. With attractive yields and potential rate cuts ahead, Ghosh believes this is a good time for investors to enter India's fixed-income market.