3 min read.Updated: 14 Mar 2022, 11:04 PM ISTR Sivakumar
Play defensive with shorter duration, target maturity funds in a rising rate environment
Globally, the Russia-Ukraine war and domestically, the Budget and the outlook for monetary policy are creating uncertainties. Due to the lockdowns that started two years ago, the domestic macroeconomy has been struggling. But the economy was running weak even before we hit the pandemic. As a result, the three-year compound annual growth rate (CAGR) of real GDP was barely above 1% for the first nine months of this fiscal. This poor growth has been accompanied by relatively high inflation, which for the past two years has been averaging close to 6% — a situation that is close to stagflation. It is understandable, then, that the focus of policy, both fiscal and monetary, appears to be on reviving growth.