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India rate-cut hopes steer mutual funds toward debt schemes
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Mutual funds flowing into short- and medium-term debt funds as rate-cut expectations rise.
After September’s ₹1.02 trillion outflows—mainly from liquid and money market schemes—India’s mutual funds are redirecting capital into short- and medium-term debt funds. Managers expect investors will favour duration exposure ahead of anticipated RBI rate cuts. The shift aims to balance yield pickup with controlled risk. New flows into corporate bond and gilt funds are rising, indicating strategic rotation in fund allocation amid a changing rate outlook.