State Street, Voya Seek Shelter From Default Risk

Global inflation and energy price concerns are driving a shift in fixed income allocations, potentially impacting foreign investment in Indian debt.

• •State Street and Voya Investment Management are buying mortgage bonds and other securitized debt.
• •This shift is due to rising energy prices and growing inflation fears.
• •Corporate bonds are perceived as increasingly risky.
• •Risk flag: Increased global risk aversion could lead to FII outflows from emerging market debt, including India.
• •Risk flag: Higher energy prices could fuel domestic inflation, pressuring RBI to maintain hawkish stance.