New Delhi । As the Reserve Bank of India’s (RBI) 125 basis points interest rate cut cycle approaches its end, financial experts are advising investors to recalibrate their debt portfolios for 2026. With limited scope for further rate cuts, the focus is gradually shifting from capital gains to stability and predictable returns.
Market experts suggest that investors should now prioritise accrual-based debt strategies, which aim to generate steady income by holding quality bonds until maturity. Such strategies can help protect portfolios from interest rate volatility as the rate cycle stabilises.
Secondly, investors are being advised to consider short-to-medium duration debt funds. These funds strike a balance between risk and returns, offering better yield visibility while avoiding the higher interest rate risk associated with long-duration bonds.
The third key strategy involves maintaining high credit quality in debt investments. Experts caution against chasing higher yields through lower-rated instruments, emphasising that capital preservation should remain the primary objective in a low-rate environment.
With inflation showing signs of moderation and monetary policy nearing a pause, financial planners believe 2026 will demand a more conservative and income-oriented approach to debt investing. Investors are encouraged to align their portfolios with their risk appetite and investment horizon to safeguard returns amid changing interest rate dynamics.