New Delhi, March 18 -- The 10-year Indian bond yield, once trading at 12-13% in the late 90s, has now dropped from its 5-year high of around 7.5% to 6.7% as of February-end 2025.

With the start of the interest rate cut cycle, yields are expected to fall further. And with no indexation benefits in debt mutual funds, this raises an important question: "How can investors maximize on their fixed income returns?"

Typically, there are two ways to maximize debt mutual fund returns - 1. By taking credit risk (investing in risky lower-graded debt instruments) and 2. By taking duration risk (investing in safer, high-graded long maturity debt instruments). Let us see how these strategies have played.

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