Fixed Income Pulse – April's Debt Market Snapshot & Debt MFs Insights
Financial Report
April brought a shift in market tone—bond yields eased, liquidity turned surplus, and the rupee gained strength against a weakening dollar.
Short-term categories like Money Market and Low Duration Funds led performance in the sub-1-year segment, delivering over 10% returns, while Overnight Funds remained the most stable for ultra-short-term needs. Over longer horizons, Long Duration, Gilt and Credit Risk Funds stood out with 2-year CAGRs above 8%, driven by falling interest rates and credit spread compression. (Returns shown are median category performances)
Domestic bond yields dropped sharply in April, with the 10-year benchmark falling 23 bps—the steepest monthly decline since March 2020—on the back of RBI’s dovish tone and expectations of continued liquidity support.
The RBI conducted ₹1.20 lakh crore in OMO purchases, bought ₹1 lakh crore in G-secs via screen trades, and announced ₹1.25 lakh crore of fresh OMOs for May.
Meanwhile, FPIs turned net sellers in Indian debt, pulling out ₹26K crore in April after strong inflows in March.
The rupee strengthened from 87.33 to 85.05. On the global front, crude oil prices posted their sharpest monthly drop since 2021, pressured by geopolitical uncertainty and softening demand outlook.
The attached snapshot covers all these developments, along with mutual fund performance trends across categories.
We believe the insights will help you stay informed and aligned with the evolving macro and market landscape.
Click below to read the full snapshot attached.