Experts share insights on potential of Indian bond market for investors

As the US Federal Reserve signalled a potential end to interest rate hikes, the question arises, will interest rates in India follow suit? With the Reserve Bank of India (RBI) already on pause, it is worth considering if this spells a potential opportunity for debt fund investors. Suyash Choudhary, Head of Fixed Income at Bandhan Mutual Fund stated that India is currently at the peak of the rate hike cycle and investors should look at bond funds for investment.

"In the last 1.5 years, the bond market has been more volatile than any other asset classes, making it a more attractive option for investors," he told CNBC-TV18.

“Rate hike expectations globally are now peaking and they have matured. India has compressed its external account very remarkably. So, external imbalances that faced us last year are out and inflation is on a downward trajectory. So, we are at the top of a rate hike cycle. Investors should be looking at quality fixed income, especially in the three to six area in our view. This would curb reinvestment risk as the cycle matures and some modest amount of rate cuts come through even in India, probably over 2024," he said.