Carry, Credit & Convexity: A balanced bond investing strategy for FY26
With inflation at a low ebb, growth steady and global central banks nudging toward ease, India’s bond market is offering a rare window. The strategy? Lock in carry, dial in selective credit and keep a modest long-duration tilt.
Macro & Global Backdrop
India’s inflation engine is cooling—headline CPI at 1.54 % in September—while growth remains resilient at ~7.8 % in Q1 FY26. That gives the Reserve Bank of India (RBI) ample policy ammunition to stay supportive. Globally, the Federal Reserve appears poised for further cuts, the European Central Bank is already easing, and the Bank of England is cautiously waiting. The result: falling global term premiums that play into India’s duration story.
Market Snapshot
The new 10-year G-Sec…
