Debt MF returns may remain subdued on RBI's accommodative stance

Money managers say investors to look at medium-duration bonds

The Reserve Bank of India (RBI) pledge to maintain an accommodative stance means investors in debt mutual fund (MF) schemes will have to lower their return expectations.

Within the wide gamut of products debt MF categories, money managers say, investors will be better off investing in medium-duration schemes. Also, other categories such as corporate bond funds, banking & PSU debt funds and credit risk funds could be considered by the investors, they add.

“The RBI policy has reiterated our earlier view that investors should expect low single-digit returns from the bond market in FY22 and will have to increase their