Shorter term debt mutual funds in focus as policy normalisation nears

Anticipating an increase in interest rates over the medium term, debt fund managers are advising investors to focus on funds with an average maturity period of around one-three years.

The Reserve Bank of India (RBI) on Friday kept the key policy rates unchanged but signalled a shift towards policy normalisation. 

Categories like, low duration fund, money market funds and short duration funds are best suited in the current environment, says the market participants.

While the monetary policy committee decided to continue with an ‘accommodative’ stance, Sandeep Bagla, CEO of TRUST Asset Management Company (AMC) says that RBI policy is hawkish