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Skip duration bets, stick to shorter and medium-duration funds
Business Standard
|December 27, 2025
After a phase of policy easing and bond market rallies, debt mutual fund investors are heading into a different environment in 2026.
The consensus among experts is that gains from falling interest rates are largely behind us. What lies ahead is a year of relative rate stability.
Limited room for rate cuts
The central bank cut the repo rate by 125 basis points in 2025. That phase has largely played out. “Any further cut depends on inflation staying below the target, and some drag on growth,” says Mayur Chauhan, fund manager - fixed income, Quantum AMC.
The Reserve Bank of India (RBI) expects inflation to move closer to 4 per cent in the first half of FY26. “There may be one final rate cut on February 6, but the probability is less than 50 per cent,” says Joydeep Sen, independent debt market expert.
Duration bets are best avoided
This story is from the December 27, 2025 edition of Business Standard.
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