CIO–Fixed Income Rajeev Radhakrishnan said, “This is a period of assessing lag effects. Persistently high inflation led to a change in monetary policy stance across key economies. Domestically, our monetary policy is at an inflection point however a path to a turn in the cycle remains bumpy at present even as the potential change in liquidity stance could enable yield to move lower. Peak policy rates favour a higher duration stance as compared to the previous financial year.”
An outright heavier positioning is currently constrained on account of low visibility on an immediate turn in policy stance.
Higher relative supply and normalisation of liquidity have led to the widening of spreads.
Spreads remain tighter than the long-term average and could reset higher over H1FY24, thereby giving a positive view on AAA spreads.
SBI Mutual Fund is the largest domestic mutual fund house managing an AUM of over Rs. 7.76 lakh crore with its fixed income AUM at over Rs. 2.38 lakh crore as on May 31, 2023.