Indian Investors Flock to Bonds for Stability and Higher Yields
Indian investors are flocking to bonds, drawn by their stability and potential for higher yields. This shift comes amidst market volatility and a regulatory liberalization that's opened the market to foreign investors.
Corporate bonds, in particular, are gaining traction. They now offer higher yields than government securities, thanks to improved corporate balance sheets and credit ratings. This makes them an appealing addition to a balanced portfolio, which can optimize risk-adjusted returns.
Institutional investors, both domestic and international, are driving this trend. Regulatory changes since 2020 have allowed greater foreign participation, making the market more accessible. This has led to India's inclusion in major global bond indices like JP Morgan GBI-EM and Bloomberg Emerging Market Local Currency Government Index, projected by 2025. This increased interest has contributed to a growing bond market.
Indian investors are seeking stability and higher returns in bonds. Corporate bonds, with their improved yields and safety, combined with government securities, offer a balanced portfolio that outperforms traditional fixed deposits. The growing interest, supported by regulatory changes, is set to reshape the Indian bond market.
