Wealth Forum Tv

Next trigger for bond bulls is not rate cuts - its liquidityShriram Ramanathan, HSBC MF, Mumbai

Share this Video :
More From :fund talk
Video Summary
Read in
  • English

US bond markets are gyrating with every new data point release, unlike our markets which are a lot more stable. US rate cut cycle should begin later this year, but expect the terminal rate to be higher than previously forecast, as inflationary pressures prevent rates from declining too much.

India seems on track to achieve a difficult balance of 7%+GDP growth with inflation below 5%. Once this gets cemented, the stage can be set for a structural decline in interest rates from FY26 and beyond – which can go beyond the couple of rate cuts markets are looking at in FY25.

The next trigger for bond bulls is not rate cuts – its liquidity. Shriram expects RBI to start releasing some liquidity into the system from the July-Sep quarter, which itself can help yields at the short end reduce by 60-70 bps. He reiterates his call on 3-5 yr bonds being an attractive opportunity fora 12-18 month horizon, even as he continues to see longer term value in higher duration funds to play the likely structural bonds bull market over the next 3years.

HSBC Corporate Bond Fund plays very well into this opportunity as it is invested almost entirely in 2028 bonds with a roll down strategy.

HSBC Dynamic Bond Fund is well positioned for the expected rate cut cycle in the second half if this fiscal year and also a potential larger bull market that can play out over time.

Share your comments
(Type INV if you are an investor)
Comments Posted
Manmohan ARN NO :being POLITE Services Gwalior , 15 May 2024

HSBCs operations is very poor.

Copyright 2017   All Rights Reserved.Wealth Forum Ezine