With the Reserve Bank of India (RBI) hiking the repo rates (rates at which central bank lends money to commercial banks), high inflation and tighter liquidity conditions have reduced the steepness of the yield curve.
This, according to many experts, is a good time to invest in fixed income as part of one’s portfolio.
"Attractive yields, a wide variety of schemes and tax benefits for long-term holdings are just some of the benefits," said Rahul Goswami, CIO of Fixed Income at ICICI Prudential Mutual Fund.
Goswami was discussing the opportunities in the fixed income market in CNBC-TV18 's special show 'Smart Money'.
Fixed income broadly refers to those types of investment security that pay investors fixed interest or dividend payments until their maturity date. At maturity, investors are repaid the principal amount they had invested.
Government and corporate bonds are the most common types of fixed-income products.
In addition to purchasing fixed-income securities directly, there are several fixed-income exchange-traded funds (ETFs) and mutual funds available to investors.
For the entire discussion, watch the accompanying videoTo watch other videos in this series, click on the Smart Money tab below.