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'G-sec yields may decline'

'G-sec yields may decline'

Debt investments are not risk-free, though the risk is lower. Also, there is always a liquidity risk during uncertain times.

Kumar Nathani
Kumar Nathani

Investment mantra: To match the investment horizon of the fund with the investment objective. A liquid fund, for instance, will keep liquidity as the primary objective rather than the returns.

Best call over the past few months: Creating a liquid fund portfolio, which could manage redemptions without borrowing.

Worst call over the past few months: Missing the gilt rally. We did not expect such large rate cuts and didn’t know how long the rally would sustain.

Top picks right now: Long-term corporate bonds as well as power bonds like REC, PFC and NTPC.

View on interest rates: The G-sec yields may go down in the current year as the growth in economy slows. The 10-year G-sec yield may decline to 6.75%.

Debt funds to be recommended: For the short term, consider liquid funds. If the time period is one year, invest in income funds, which could give you returns of 10-10.5%. Go for FMPs if your investment horizon matches the duration of the FMP.

Advice to small investors: Debt investments are not risk-free, though the risk is lower. Also, there is always a liquidity risk during uncertain times.

 

— Kumar Nathani, Fund Manager, Fixed Income, Taurus Mutual Fund