Fixed-income managers are pivoting toward intermediate maturities as central bank tightening and shrinking domestic banking liquidity alter yield dynamics. In India, local debt markets continue to face headwinds from Reserve Bank of India policy actions and a weakening rupee driven by surging U.S. yields. Navigating these macro pressures requires targeting specific durations that balance persistent inflation risks with attractive entry yields. To manage these pressures, WhiteOak Capital highlights the two- to four-year segment of the yield curve as a compelling allocation opportunity.
Key points
Investors are evaluating capital allocations across different durations after markets fac…: Investors are evaluating capital allocations across different durations after markets factored in nearly four interest rate hikes.
Rising domestic inflation concerns and Reserve Bank of India tightening measures have gen…: Rising domestic inflation concerns and Reserve Bank of India tightening measures have generated headwinds for Indian fixed-income assets.
Elevated U.S. yields and high oil prices continue to pressure the Indian rupee and weaken…: Elevated U.S. yields and high oil prices continue to pressure the Indian rupee and weaken foreign demand for domestic debt.
Sources checked by our analysis pipeline: 1
With the market already pricing in nearly four rate hikes, the key question for fixed-income investors is: where should they invest now?
Should investors stick to money-market and short-duration funds, gradually move into the intermediate segment, or lock into longer-duration bonds after the recent rise in yields?
In this edition of ETMarkets Smart Talk, Piyush Barawal, Director and Senior Fund Manager at WhiteOak Capital, shares his outlook on interest rates and bond yields and explains why the two- to four-year segment of the yield curve could offer an attractive opportunity.
In this edition of ETMarkets Smart Talk, Piyush Barawal, Director and Senior Fund Manager at WhiteOak Capital, shares his outlook on interest rates and bond yields and explains why the two- to four-year segment of the yield curve could offer an attractive opportunity. Edited Excerpts -
Q) We have seen bond yields rise, liquidity tighten and expectations around the RBI's next policy move shift. What has fundamentally changed in India's fixed-income market over the past few weeks?
A) Over the past few weeks and months, quite a few things have…
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