Bonds shield portfolios amid volatility: experts
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- Financial experts from Atom Financial Services, Jiraaf, and Anand Rathi Global Finance argue that fixed-income instruments — which offer contractual coupon payments and principal repayment — reduce portfolio volatility during geopolitical and inflationary shocks.
- Anand Rathi data shows the Nifty declined roughly 4% over the past year while debt portfolios delivered returns of approximately 7-8%.
- Jiraaf's Vineet Agrawal recommends a diversified portfolio anchored by G-Secs and AAA/AA-rated bonds, with selective exposure to A- and BBB-rated investment-grade bonds, and warns against concentration in a single issuer, sector, rating, or maturity.
- Anand Rathi Global Finance's Harsimran Sahni advises lower-duration fixed-income strategies to limit mark-to-market risk, pointing to corporate bond funds, dynamic bond funds, and liquid funds as options depending on an investor's time horizon.
- Atom Financial Services' Harsha Vardhana outlines a layered allocation: sovereign G-Secs and Treasury Bills at the core, AAA and strong AA-rated corporate bonds around it, short-duration bonds of one to three years, and floating-rate bonds linked to benchmark rates.
- Agrawal says a diversified bond portfolio could target an annual pre-tax yield of around 11%, but investors should evaluate issuer financial strength and maturity profile rather than chasing coupon rates or credit ratings alone.
- Harsha Vardhana concludes that bonds should be treated as a strategic allocation rather than a tactical trade, because their stabilising effect materialises through consistent holding across market cycles, not after volatility has already spiked.
Why it matters: Anand Rathi's own data shows debt portfolios returned 7-8% against a roughly 4% Nifty decline — giving retail investors a concrete benchmark for evaluating bond exposure during the current volatility cycle, with the experts specifying an allocation framework (G-Secs core, AAA/AA layer, short-duration sleeve, floating-rate hedge) and a target pre-tax yield of around 11%.
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