Neutral impactEconomy
India’s fund managers turn to fixed income as rate cycle shifts
BusinessLine 1 hr ago·1 Oct 2026, 2:17 pm
Fund managers are shifting their focus from equities to fixed income as India's interest rate cycle appears to be turning. At the recent Morningstar Investment Conference, experts highlighted that rising bond yields are prompting investors to seek stability in debt instruments rather than volatile stock markets. This strategic pivot aims to protect portfolios against potential interest rate hikes and market corrections.
For retail investors, this trend signals a broader move towards capital preservation. As fund managers rebalance their portfolios, investors may see a higher allocation to bonds and a lower exposure to equities. This shift can reduce overall portfolio volatility but may also temper returns in the short term.
Moving forward, investors should monitor central bank policy announcements and corporate credit quality. A stable interest rate environment could eventually support equity valuations, but until then, fixed income assets are likely to remain attractive for risk-averse investors.
Excerpt from BusinessLine
Fixed income is gaining renewed attention among Indian investors as rising yields and strong corporate credit create a more favourable entry point, according to fund managers speaking at the Morningstar Investment Conference 2026. The 10-year government bond yield has climbed from 6.15 per cent in June 2025 to around…Read the original at BusinessLine
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