Bond fund investors must follow these 4 ways to beat inflation: Expert

For investors in bond funds, these strategies - better yields than inflation, reinvestment, barbell strategies, and credits - are where we see the best opportunities

We head into financial year 2021-22 (FY22) in the shadow of the second wave of the Covid-19 pandemic. Nevertheless, we should expect that this year will be post-Covid supported by the vaccination drive. Growth should bounce back, aided by higher government spending and fiscal deficit.
 
This implies a normalisation of monetary policy, i.e. the extraordinarily easy liquidity and low rates should be reversed this year. The Reserve Bank of India (RBI) has maintained an accommodative stance to aid growth. With growth returning naturally and through higher deficit spending, the need for such monetary support is no longer as strong.