Archive · 17 Jan 2026
Debt Funds Show Mixed Returns Amid Market Shifts
While the stock market has been up and down, some debt funds have done well.
Some funds that invest in medium-term bonds and corporate bonds have made good money, up to 13.6%.
Other funds that invest in US bonds have also done well, making 8.4-14.4%.
This is partly because the rupee has become weaker compared to the dollar.
However, the returns from Indian government bonds have been lower because the interest rates didn't drop as much as expected.
The best returns came from shorter-term bonds.
In the future, it might be harder to make as much money because interest rate cuts will be slower, and the big gains from last year might not happen again.
Medium duration and corporate bond funds in India delivered strong returns, up to 13.6% over the past year.
Indian mutual funds investing in US debt ETFs generated 8.4-14.4% returns, boosted by rupee depreciation.
Yields on longer-tenor Indian G-Secs fell modestly, leading to lower returns for gilt funds.
Shorter and medium tenor segments saw the steepest yield declines, benefiting medium duration funds.
Future returns may be tempered as rate cuts slow down and accrual-driven strategies become more important.
- Who
- Indian mutual funds, US debt ETFs, domestic gilt funds
- What
- Mixed returns from debt funds due to market shifts and rate cuts
- When
- January 17, 2026
- Where
- India and US
- Why
- Due to RBI and US Federal Reserve rate cuts, yield curve movements, and rupee depreciation
- Date
- January 17, 2026
- Top-Performing Funds
- Medium duration, corporate bond, US debt ETFs
- Returns
- 8.4-14.4% (US debt ETFs), 8.9-13.6% (medium duration)
- RBI Rate Cuts
- 125 basis points in 2025
- Yield Changes
- 5-year G-Secs: -23 bps, 10-year G-Secs: -8 bps, 3-year G-Secs: -55 bps, 1-year G-Secs: -92 bps
- US Fed Rate Cuts
- 75 basis points in 2025
- Rupee Depreciation
- 4.3% against the dollar
- Yield-to-Maturity (US ETFs)
- 3.5-4%