Longer-duration debt schemes get attractive

THE LATEST 25 basis point (bps) repo rate cut by the Reserve Bank of India's monetary policy committee (MPC) is expected to give a boost to longer-term debt schemes, said fund managers.

- ANANYA GROVER

Fund houses have been attracting good money from investors that they can deploy. In October, debt funds recorded their highest inflow in nearly six months at 1.6 lakh crore. However, they were unable to aggressively deploy due to adverse market conditions.

Suyash Choudhary, CIO, fixed income, Bandhan AMC, said: "We had raised our cash levels anticipating higher market volatility. In the past few days, a stronger real GDP growth rate and weaker rupee had also reduced expectations of a rate cut." He said because of the rise in yields, the AMC got an opportunity to deploy. "We are back to being overweight on five-eightyear government bonds. We expect the sovereign curve to remain steeper, and this strategy reflects the expectation."