After RBI policy, what debt investors should bear in mind for portfolios

These accrual-oriented funds can give sound returns with low volatility

The Monetary Policy Committee (MPC) of the Reserve Bank of India decided to raise the repo rate by 25 basis points to 6.5 per cent. After two consecutive rate hikes, it is expected that the MPC will pause in October. However, most experts expect the current trend of rising interest rates to continue for at least the next 12-18 months. Debt fund investors should bear this point in mind when building their portfolios.       

      

Investors should steer clear of longer-duration funds and stick to shorter-duration funds. Says Vidya Bala, head of research, FundsIndia.com: “This hike only makes