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Near-Term Visibility

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Near-Term Visibility
Near-Term Visibility
Make the most of the emerging situation in a planned manner. Avoid an aggressive switch when moving from one end of the risk spectrum to another
Nilanjan Dey - 27 May 2022
Central banking often spells bad news for the stiff upper lip. This time it was no different. The regulator, which suddenly rejigged its policy in favour of a higher repo rate, has prompted a two-fold change on the debt front. Deposits now fetch more, while borrowing costs have escalated. And that is just the surface—the classic depositor-borrower binary stands upended just as the debt fund investor is upset. It is time for the latter to alter his investment style in sync with the emerging situation. The debt market, which has already witnessed a round of uncertainty, is now expected to trigger newer investment strategies. Professional intermediaries have encouraged clients to adopt a cautious view insofar as fresh allocations are concerned. They are being particularly urged not to consider longer-term investments at this stage. Instead, short-term debt is currently the most recommended option. For those who are willing to approach the market through debt funds are being told to consider low-duration and short-term products. These stand a better chance in view of the impending...
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