''Expect retail investors to come back and invest and try to make returns,'' says S Ramasamy, CIO- Debt, LIC Nomura Mutual Fund.

In an interview with Varsha Ladewar of Myiris.com, S Ramasamy said, ''The current account deficit is hovering around 1.7% this fiscal, gives confidence that RBI will cut rates sooner than later.''

Excerpt from interview Myiris had with S Ramasamy:

1. What is your take on the current debt market scenario?

We have a bullish bias on the debt market where all the parameters of inflation, growth, Control of fiscal and CAD seems to be in place with lower commodity prices. Crude prices has come down by 30%. CPI has come down to 6.46 % in September. Also WPI has come down to 3.24%. The current account deficit is hovering around 1.7% this fiscal. These all give the confidence that RBI will cut rates sooner than later.

2. With a six month horizon, which segment of the debt market do you expect to deliver better returns?

I expect income and gilt segment to deliver better returns in a six month scenario.

3. What is the growth that you are expecting in assets of debt funds in H2FY15?

We expect retail investors to come back and invest and try to make returns. We expect Debt AUM to grow by 10% to 15% atleast.

4. Where do you see benchmark 10 year G-Sec yield in three months?

We expect the benchmark to trade between 8.00 to 8.50 range in next three months.

5. What kind of products would you advocate for people who are looking at fixed income kind of investing right now?

We recommend duration products for investors.