In current milieu, invest in schemes with shorter duration: Manish Banthia

We believe the RBI will pause rates for a longer period after the rate hikes are over. This is a typical attribute of an economy in mid-cycle; a phase India is in currently, says Manish Banthia

With the Reserve Bank of India (RBI) having shifted its inflation target from 4 per cent to 6 per cent, yields of longer duration funds are not attractive yet, says Manish Banthia, deputy chief investment officer-fixed income, ICICI Prudential Mutual Fund (MF). In conversation with Abhishek Kumar, Banthia explains why dynamic bond funds, credit-risk funds, and target maturity funds (TMFs) should be preferred by investors at this point. Edited excerpts:

With inflation easing, do you expect the RBI to pause rate hikes?

We believe the RBI will hit pause after hiking rates by another 25 basis points. This expectation stems