'Limited scope for rally in long-term bonds'

WHILE INTEREST RATES are likely to remain lower for an extended period, the structural rally in long bonds appears to have largely played out, noted a report by Axis Mutual Fund.

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It has advised investors to consider shifting to short-duration or accrual strategies. The steepening yield curve favours two-five-year corporate bonds, which offers better risk-adjusted returns, it said and noted those with long-term liabilities may still find value in long bonds, especially if they can withstand short-term