Short-term debt opportunity

In its monetary policy last week, the Reserve Bank held rates steady though it marginally increased inflation projections for the next fiscal year. The policy also noted inflation risks from rising crude oil prices and the Budget-declared crop MSP hikes. With prospects for rate cuts, thus remote and markets building in higher rates, an accrual strategy – which doesn’t bet on interest rate direction – can work well now. Shorter-term accrual funds also stand to benefit from interest rate uncertainty. UTI Banking & PSU Debt, HDFC Short Term Opportunities, and Axis Banking & PSU Debt are good options here. They have all delivered above-average returns while sticking to top-quality papers

In its monetary policy last week, the Reserve Bank held rates steady though it marginally increased inflation projections for the next fiscal year. The policy also noted inflation risks from rising crude oil prices and the Budget-declared crop MSP hikes. With prospects for rate cuts, thus remote and markets building in higher rates, an accrual strategy – which doesn’t bet on interest rate direction – can work well now. Shorter-term accrual funds also stand to benefit from interest rate uncertainty. UTI Banking & PSU Debt, HDFC Short Term Opportunities, and Axis Banking & PSU Debt are good options here. They have all delivered above-average returns while sticking to top-quality papers

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