Debt Investing in a Changing Economy: Insights with Mahendra Jajoo

Foreigners will not possibly be the influential factor this year.
Is saal humare paas aur bhi bahut saare positive factors hain , to feel excited about fixed income.

Ek reason jo har kisi ke liye debt mutual funds consider karne ka ho sakta hai
woh yeh hai ki debt mutual funds investor ke liye kaam karte hain,
jabki banks khud ke liye kaam karte hain.

Debt mutual funds offer market-related returns
across different range of products,
jinmein alag-alag risk-return profiles hoti hain.

So as a thumb rule, main yeh kahunga ki yeh depend karta hai ,
person ki age profile pe,
risk-taking profile pe,
aur actual purpose ke upar jiske liye aap invest kar rahe hain.

Kyuki debt aapko stability deta hai aur low volatility,
toh yeh samajhna zaroori hai ,
kaunse debt products aapke radar mein hone chahiye?

Shiv:
Hello everyone! Swagat hai aapka Bazaar & Beyond mein , ek aisa podcast jahan hum finance, investment aur personal growth ke world mein deep dive karte hain to help you make smarter decisions with your money.
Main hoon aapka dost aur host, Shiv Narayanan.

Aaj hum baat karenge ek aur interesting topic par:
“The Evolution of Debt Investing in an Uncertain World.”

Recent developments jaise ki Union Budget, global macro events aur market volatility ne financial landscape ko kaafi impact kiya hai. Inhi economic shifts aur market dynamics ke context mein, debt investing portfolio ka ek important component ban chuka hai.

Toh iss evolving landscape par expert insights lene ke liye, humare saath hain Mr. Mahendra Jajoo, CIO – Fixed Income, Mirae Asset Investment Managers India Pvt. Ltd.

Chahe aap ek seasoned investor ho ya debt instruments mein newcomer, yeh episode aapko equip karega with valuable knowledge to navigate the world of debt investing.

Welcome to the show, Mahendra sir! It's a pleasure to have you here.

Mahendra Jajoo:
Thank you for inviting me!

Shiv:
Shuru karte hain. Mera pehla sawal , hum sab jaante hain ki economic growth par kaafi focus hai. Lekin fiscal consolidation ke jo targets hain , kya woh realistically achievable lagte hain?

Mahendra:
Dekhiye, yeh government lagbhag 10 saal se satta mein hai, aur har saal unhone fiscal consolidation ke prati apne commitment ko pura kiya hai.
Covid jaise extraordinary situation ke baad bhi, Bharat ne jis tarah se recovery ki hai, aur aaj humari economy duniya ki fastest growing economies mein se ek ke roop mein dekhi ja rahi hai , yeh sab achievements government ke track record ka hissa hai.

Toh mujhe lagta hai ki government ke numbers ko confidence ke saath accept karna chahiye.

Haan, ye bhi sach hai ki ab economy ka momentum thoda slowdown ho raha hai. Last kuch saalon mein tax buoyancy kaafi improve hui thi, lekin ab ek saturation point aa raha hai.

Kuch analysts ka maanna hai ki agle saal ke revenue growth projections mein, income tax collection ke liye 15% growth expect ki gayi hai.

Ek taraf government bol rahi hai ki hum ₹1 lakh crore ka relief de rahe hain, doosri taraf woh 15% zyada tax bhi collect karna chahti hai , toh kuch assumptions thode stretch zarur lagte hain.

Par haan, pichhle saal income tax collection 20% tak grow hua tha, compliance culture improve ho raha hai, aur log tax net mein aa rahe hain.

Toh overall mujhe lagta hai ki target ambitious hai , given the economic momentum , lekin government usse achieve kar legi. Agar capex fully spend hua, toh uska multiplier effect bhi revenue badha sakta hai.

Shiv:
Agar hum India ki fiscal credibility ki baat karein, toh is fiscal consolidation ka kya impact ho sakta hai?

Mahendra:
Impact toh hum already dekh rahe hain. Jaise maine pehle bhi kaha, government ka 10-year track record hai fiscal targets achieve karne ka.
Unka clearly stated target hai ki FY26 tak fiscal deficit ko 4.5% tak le aana hai.

Covid ke time fiscal deficit 9% se bhi upar chala gaya tha, lekin uske baad government ne discipline dikhaya.

Pichhle saal hi global rating agencies ne bhi yeh kaha tha ki woh watch kar rahe hain , kya government apne target ko achieve kar pati hai ya nahi.
India ki sovereign rating upgrade ki jo expectation hai, usmein fiscal consolidation ek key factor ban gaya hai.

Toh fiscal discipline bahut important hai , not just domestic investors ke liye, but global perception ke liye bhi.

Shiv:
Bilkul. Ab jab hum global developments ki baat karte hain , jaise ki US ke tariff decisions, immigration policies, ya Indian rupee ki volatility , toh aapko kya lagta hai ki ye uncertainties aage bhi rehenge?

Mahendra:
Volatility toh rahegi hi. Abhi jo poora global agenda hai woh largely Mr. Trump ke decisions se drive ho raha hai , especially agar woh wapas aate hain.
Toh tariffs, immigration, global trade sab kuch unpredictable hai.

Lekin debt market ke context mein, mujhe lagta hai ki yeh volatility supportive ho sakti hai fixed income investors ke liye.

Globally, interest rate easing ka ek cycle start ho chuka hai.
Humne dekha ki:

• Fed ne past 6 mahine mein rates cut kiye
• Bank of Canada ne bhi recent mein cut kiya
• European Central Bank ne bhi rates cut kiye hain

India mein economy already thoda slowdown mode mein hai.
Last quarter growth sirf 5.4% thi. Budget mein bhi government ne fiscal prudence dikhaya hai.

Toh mujhe lagta hai RBI bhi gradually accommodative stance ki taraf badh raha hai.
Agar interest rates neeche jaate hain, toh wo fixed income investors ke liye achhi khabar hai.

Shiv:
Toh yeh kehna sahi hoga ki jitna geopolitical stability badhega, utna hi favourable hoga emerging economies ke liye?

Mahendra:
Bilkul. Geopolitical tensions jaise Russia-Ukraine war ya US-China trade war supply chains ko disrupt karte hain.

Agar stability aati hai:

• Input costs neeche aate hain
• Currency stable hoti hai
• Inflation control mein rehta hai

Yeh sab fixed income investing ke liye positive developments hain.

Agar tariffs badhenge toh global slowdown ka risk bhi hota hai, lekin inflation control mein aata hai , toh net-net yeh central banks ko action lene ka scope deta hai.

Globally, mujhe lagta hai ki interest rates downward trend mein hain , aur yeh Indian bond investors ke

Shiv:
Sir, pichhle saal ek excitement tha jab Indian government bonds ko global indices mein include kiya gaya. Kaafi inflows aaye the India mein, month-on-month.
Lekin year-end tak rupee ki volatility ki wajah se ye flows kaafi kam ho gaye the.
Aapko kya lagta hai , is saal sovereign debt mein foreign investor flows ka kya outlook hai?

Mahendra:
Bilkul sahi kaha aapne. Pichhla saal ek one-off event tha.
Pehli baar Indian government bonds ko global bond indices mein include kiya gaya , jiski wajah se lagbhag $25–30 billion tak ka one-time fund inflow hua.

Lekin ye inflow ek baar ka tha, repeat hone wala nahi hai.

Is saal jo story hai, wo thodi alag hai.
Foreign investors ka focus is saal Brazil jaise countries par hai , jahan ki currency already 20% depreciate ho chuki hai.
Wahan 10-year bond yield 11.5%–12% ke aaspaas hai.

India mein rupee ne utna depreciation nahi dikhaya compared to other EM currencies.
Is wajah se agar aapko global investors ko attract karna hai, toh rupee ka thoda depreciation hona desirable hai , taaki unko arbitrage ka advantage mile.

Toh haan, rupee volatility ab strategic ban gayi hai , not just a risk, but ek tool to remain competitive.

Shiv:
Toh kya yeh kehna galat nahi hoga ki is saal foreign flows utne influential factor nahi honge jitne pichhle सालथे?

Mahendra:
Bilकुल. Foreign inflows itna bada factor nahi honge iss saal.
Lekin humare paas khud ke kaafi positive domestic triggers hain fixed income ke liye excited hone ke:

• Rate cuts ka possibility
• Economic slowdown ki wajah se easing ka scope
• Fiscal consolidation ka signal
• RBI ka accommodative stance
• Aur local demand bhi strong hai

Toh even without large foreign inflows, fixed income market ka outlook kaafi constructive lagta hai.

Shiv:
Sir, yeh kaafi interesting insights the , kyunki investors aur media ka zyada focus equities pe hota hai. Fixed income ya debt markets ka broader narrative discuss nahi hota.
Thank you for simplifying it for our listeners.

Shiv:
Sir, ek aur important topic , Indian banks ki deposit mobilization challenge. Aapka ispe kya take hai?

Mahendra:
Dekhiye, last 1–1.5 saal mein market bahut rapidly change hua hai.

COVID ke baad RBI ne interest rates kaafi low kar diye the.
Ek samay tha jab banks ko 3.5–4% par bhi deposit mil raha tha.

Lekin jaise hi global inflation Russia-Ukraine war ke baad spike hua, aur central banks ne rate hikes shuru kiye , Indian banks ne utni jaldi respond nahi kiya.

Credit demand toh 20% tak grow hua, lekin deposit growth sirf 8–8.5% ke aaspaas hi tha.

Main banking ka expert nahi hoon, but mujhe lagta hai banks ne depositors ko thoda granted liya.
Unka assumption tha ki log FD mein hi paisa lagayenge, unko wholesale market ka pata nahi hota.

Ek aam investor ki complaint yeh hoti hai ki:

Jab aapne housing loan liya ho aur RBI rate hike karta hai, toh agli subah se EMI badh jati hai.
Lekin deposit interest rate utni tezi se nahi badhta.

Yehi difference hai banks aur debt mutual funds mein.

Debt funds aapko market-linked returns dete hain , interest rates badhte hain, toh return bhi upar aata hai.
Banks ke saath retail investor ki bargaining power kam hoti hai.

Shiv:
Exactly. Jab investor loan leta hai, turant rate upar chala jata hai. Jab deposit karta hai, return utna nahi badhta.

Mahendra:
Correct. Banks aggressive nahi the deposit rates badhane mein.

Usi waqt equity markets achha perform kar rahe the.
Logon ke paas alternative avenues the , equities, gold, real estate.

Gold ne all-time high touch kiya.
Property markets COVID ke baad revive ho gaye.
Toh naturally, bank FDs unattractive lagne lage.

Banks mein thoda complacency bhi tha , unka maanna tha ki log waapas aayenge.

Shiv:
Sir, toh iska solution kya hai?

Mahendra:
Simple , banks should offer market-aligned deposit rates.

Jis din yeh hoga, har Indian wapas FD karega.
Indians love fixed deposits.

Aur waise bhi ab banks shuru kar rahe hain competitive rates offer karna.

Investors bhi actively discuss kar rahe hain.

Shiv:
So in simple terms, kya yeh kehna theek hoga ki debt mutual funds ko investors ko seriously consider karna chahiye?

Mahendra:
Bilkul.

Sabse bada reason yeh hai ki debt mutual funds investor ke liye kaam karte hain, banks apne liye.

Debt funds ek pass-through vehicle hote hain , market se jitna return aata hai, expense ratio ke baad mostly investor ko milta hai.

Agar fund ka market return 10% hai, toh investor ko bhi 10% milta hai (minus fees).

Compare karein banks se , jahan pricing bank ke interest pe hoti hai, na ki investor ke.

Dusra benefit , range of options.

Banks aapko 1-month, 3-month, 6-month FD dete hain, lekin woh aapki risk profile ya liquidity need match nahi karte.

Debt funds mein aapko har duration aur risk-return profile ke hisaab se category milti hai.

Salaried ho, short-term ya long-term investor ho , aapke liye koi na koi fund hota hi है.

Shiv:
Sir, in your opinion, debt products ka kya weightage hona chahiye investor ke portfolio mein?

Mahendra:
Dekhiye, har investor ka risk profile alag hota hai, toh as fund managers, hum kisi individual ko direct prescription nahi de sakte.

Unko apne advisor ke saath milkar invest karna chahiye.
Lekin agar ek thumb rule ki baat karूं , toh yeh teen cheezon pe depend karta hai:

1. Age profile
2. Risk-taking ability
3. Investment ka objective

Aam taur par, log apni journey equity se shuru karte hain , higher exposure.
Lekin jaise-jaise wo apne goals ke kareeb aate hain, woh gradually debt mein exposure badhate hain , kyunki debt deta hai stability aur low volatility.

Shiv:
Makes total sense. Aur aaj ke environment mein , kaunse debt products investors ke radar pe hone chahiye?

Mahendra:
Aaj ke environment mein mujhe do categories sabse relevant lagti हैं:

1. Low Duration Category
   • Kyunki expectation hai ki RBI liquidity inject karega
   • Interest rates ya toh stable रहेंगेया थोड़े नीचे आएंगे
   • Abhi corporate bond yield curve inverted है , lekin lag रहा है wapas regular steep curve aayega
   • Toh low duration products ek achha position hold kar रहे हैं
2. Long Duration Category
   • Agar hum expect कर रहे हैं ki interest rates neeche aayenge
   • Toh maximum benefit long duration funds mein milta है
   • Ye interest rate fall ka sabse zyada upside capture karta है

Ideal Mix:

• 60–75% low duration
• 25–40% long duration (investor preference ke hisaab se)

Of course, aur bhi product options hain, but mujhe lagta है ye do basic buckets har investor consider कर सकता है.

Shiv:
Mahendra sir, ye discussion kaafi insightful raha. Humein time dene ke liye bahut-bahut shukriya.

Mahendra:
Thank you, thank you once again for inviting me. Absolute pleasure.

Shiv:
Toh doston, jaise ki aapne suna , economic shifts, market volatility aur policy changes ke beech, debt investments ek strong tool ban kar ubhar rahe hain.

Stability, diversification aur steady returns ke liye yeh segment kaafi promising hai.
Interest rate cycles, policy impacts aur risk management ko samajhna crucial hai , taaki aap informed investment decisions le sakein.

Agar aapko yeh episode pasand aaya ho, toh Bazaar & Beyond ko zarur subscribe karein, share karein aur comments mein feedback dein.

Next episode mein hum phir milenge ek naye topic ke saath.
Tab tak ke liye , Stay informed, stay invested.

Main hoon aapka host Shiv Narayanan, signing off.

Take care and happy investing.