Chirag Doshi's bond strategy for FY26: What should investors do?

Chirag Doshi, CIO-Fixed Income at LGT Wealth India, believes the current market conditions are ripe for investors to capitalise on bond investments—particularly medium to long-duration government securities.

In an interaction with ETMarkets, Doshi recommended a strategic shift in portfolio allocations, especially for those aiming to benefit from the anticipated rate easing cycle. “It is always advisable for clients in an easing interest rate cycle to shift their portfolios towards medium and long duration bonds to make use of the capital gains that they would have when the prices move up and the yields go down,” he explained.

Doshi outlined that long-duration bonds typically outperform in falling rate scenarios due to their heightened interest rate sensitivity. He advised investors to consider locking in current yields, citing that the RBI is likely to implement further rate reductions in the coming quarters.

“It is prudent to lock in right now rather than wait. When there is one more rate cut, the investors can double up when the confidence is higher that the rates are further going to slide lower,” he said.

A balanced strategy for retail investors

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To help retail investors navigate the current fixed-income landscape, Doshi advocated for a diversified approach. He suggested allocating 40–50% to government bonds, 20–30% to state development loans, and 20% to high-rated corporate bonds. This combination, he said, offers a balance of liquidity, capital appreciation, and yield stability.

“Have a