Debt Market Outlook-Feb 2022

Key highlights

• Bond market investors generated low single-digit returns in 2021.
• We expect government bond yields to harden gradually from here even as India?s economic recovery remains incomplete.
• RBI is likely to move forward with monetary policy normalization and raise policy rates in a gradual manner.
• Investor with higher investment horizon should focus on target maturity bond ETFs or bond index funds with residual maturity of at least 3 years.