Debt Mutual Funds Shift Toward Short-Term Bonds in 2025

Indian mutual fund managers are increasingly reallocating debt portfolios toward short term bonds in 2025, avoiding long duration exposure amid persistent interest rate uncertainty. With inflation risks still elevated and global central banks signaling caution on rate cuts, fund houses expect tighter financial conditions to continue. The shift focuses on lowering duration risk, limiting mark to market volatility, and preserving liquidity during a prolonged period of monetary policy uncertainty.