a testimony to this as portfolio managers we have a fiduciary responsibility in terms of our investor mandates we have to be convinced fully in terms of the issuer security structure and credit performance before we commit to any investment it is backed by a rigorous and quality process and people infrastructurehow long is the interest rate upcycle likely to last this timethe rbi is clearly focused on inflation as the key driver for their policyinterest rate and liquiditydecisions given the current and expected trajectory of inflationour estimates for 201819 and 201920 are comfortably in the rbi 4 2 rangegoing forward we dont envisage more than one or two rate hikes given that markets have already priced in a bulk of this move we dont see rates rising beyond the recent highs over the next 612 months the risk to our view can come from loose local or global fiscal policies which can have a negative impact on the inflation trajectorywhat type of bond funds make most sense for investors nowgiven the fact that a large part of the interest rate move has happened bond funds across categories look attractive from a oneto threeyear time frame however we are still some way away from any secular downward move in rates given the evolving local and global macro trendsin this environment of rangebound rates and attractive carry investors could choose from high grade ultras shortterm and shortterm funds or high yield credit risk funds which operate with a 13 year neutral duration strategy in the near future carry will be the predominant driver of returns in the fixed income category duration funds can be a tactical play for now till such time there is clarity on the macro environmenthave the revised scheme categorisation norms for bond funds impacted fund managers are investors better off under the new structurethe scheme recategorisation has provided muchneeded clarity in terms of interest rate and credit risk that various categories of funds carry it also makes life easier for investors to compare funds in the same category and take informed decisions based on their riskreturn profile from our perspective given that we have always adhered to fund positioning in letter and spirit the formal fund categorisation reinforces our stand of being truetolabel