India, Dec. 23 -- Most analysts seem to converge on the fact that the lower interest rate regime is winding down. Central banks, including the Reserve Bank of India, may go slow on further reductions, although there may be -12 cuts in the future. With much of the so-called duration rally already priced in, Axis Mutual Fund expects the investor preferences to shift decisively toward accrual-focused strategies. Short-tenor corporate bonds with better interest rates, and selective exposure to high-quality credit, which are safer and secure, are likely to remain in focus as the yields stabilise due to dovish mindset.

The fund house expects the 10-year G-sec yield to trade in a 6.4-6.6 per cent band, supported by benign, even zero or negative...