Budget 2026: How Investors Should Position Debt Portfolios for Stability

• Budget 2026 emphasizes fiscal prudence and significant borrowing for growth, ensuring continuity in debt markets.
• Yields for Government securities are expected to remain range-bound, with RBI likely to use OMOs to manage liquidity.
• Corporate bond market deepening through new instruments will have a gradual impact on retail portfolios.
• Investors should prioritize high-quality credits and accrual-oriented mutual funds like corporate bond, short-duration, and money-market funds.
• Avoid chasing incremental yield with lower-rated bonds due to volatile global rates; focus on patience and aligning investments with cash-flow needs.