Expect a strong bond bull market ahead in FY25-26, with RBI amply supporting markets with rate cuts, liquidity infusion and a clear accommodative stance.
Liquidity infusion in last 3 months has been equivalent to covid time infusion – over Rs. 8 trillion.
Expect 10 yr G-sec yields to soften by Mar 26 to 6% -6.15% range. Expect 2-3 rate more rate cuts in this FY.
We are a lot better prepared now for currency market volatility (if China devalues as part of its trade war moves) than 2013 as annual remittances and service exports are way higher now than a decade ago, which will keep FX reserves in good shape.
Groww Short Duration Fund is currently running duration of around 2.85 (March end portfolio) – close to the cap of 3. Credit quality is AAA/G-Secs. This is an actively managed fund – not a roll down strategy.
Groww Dynamic Bond Fund is currently running duration of 9. This actively managed fund has seen duration ranging from 3 to 11, nimbly changing as per market conditions.
Investors with sufficient risk appetite and ability to navigate volatility can consider participating in this bond bull market through dynamic bond funds and long duration income funds.