75%, investors still have an opportunity to lock in attractive fixed-income yields, even though the biggest gains from the recent rate-cut cycle may be behind us. For investors with a three-year horizon, the focus now shifts from chasing capital gains to earning steady carry while managing credit, liquidity and reinvestment risks.

So, how should an investor deploy ₹1 crore in bonds today? Vineet Agarwal, Co-founder, Jiraaf, suggests a diversified and staggered approach, with G-Secs and SDLs forming the safety core, AAA corporate bonds adding yield, selective credit opportunities providing incremental returns, and T-bills or money-market instruments offering liquidity.

German finance ministry links high borrowing costs to security overhaulGermany's borrowing costs have surged to their highest level in fifteen years, influenced by increased security threats following Russia's invasion of Ukraine. The Finance Ministry emphasizes the necessity for substantial investments in defense and security.

Meanwhile, bond yields in other leading Western nations have also risen sharply this week, complicating fiscal policies and raising borrowing costs for both businesses and consumers. He also recommends laddering maturities across one, two and three years rather than putting the entire corpus into a single maturity.

In an interaction with Kshitij Anand of ETMarkets, Agarwal explains how investors can construct a ₹1 crore fixed-income portfolio, whether they should lock in yields now or wait for higher rates, and why selective credit exposure could enhance returns without taking excessive risk. Edited Excerpts –Q) What is your take on the MPC policy meeting outcome?

Do you see interest rates going higher or lower in 2026? 25% with a neutral stance is prudent.

9%. This limits the urgency for further easing.

75%, already on the higher side relative to the policy rate and about 29 bps higher than a year ago. Our base case is therefore a prolonged pause, with a mild downward bias over the medium term if inflation moderates.

However, oil prices, food inflation and global yields could keep bond yields elevated in the near term. 25%, are we still in an environment where investors can lock in attractive yields, or has the best part of the rate cycle already passed?

A) Yes, investors still have a meaningful opportunity to lock in yields. While the strongest capital-gain opportunity from the 125-bps rate-cut cycle may be behind us, the carry opportunity remains attractive.