Investors should stagger entry into medium-to long-duration debt funds

Take limited exposure, counter risk of possible decline in NAV with adequate investment horizon

The Reserve Bank of India (RBI) halted its rate hike cycle in its April monetary policy review, prompting investors to anticipate a downward turn in interest rates. According to data on interest-rate swaps, it appears that interest rates may begin to decline in the early part of next year. The International Monetary Fund (IMF) has also weighed in, stating that the recent surge in real interest rates is likely to be transitory.
 
“The effect of interest rate hikes will manifest in demand moderation, leading to lower inflation expectations. Inflation readings will come down gradually, validating the RBI's decision to