In the current financial landscape, fixed-income investors in Mumbai are increasingly turning to corporate bond funds as a strategic alternative for steady returns amid rising inflation and interest rate uncertainties. The benchmark 10-year bond yield has seen fluctuations, climbing from 6.68% on March 2 to a peak of 7.12% on April 3, currently stabilizing around 7%. According to Manish Banthia, chief investment officer of Fixed Income at ICICI Prudential Mutual Fund, corporate bond funds are particularly appealing as they provide yields ranging from 7-7.5%, which is significantly higher than the 6.25-6.59% offered by three-year bank fixed deposits. This yield advantage, coupled with the potential for healthy accrual opportunities, positions corporate bonds favorably, especially in a market where interest rates may continue to rise. Additionally, inflation poses notable risks due to high crude oil prices and the depreciation of the Indian rupee, which could increase import costs and affect domestic food prices, as highlighted by Rahul Goswami, CIO & MD of India Fixed Income at Franklin Templeton Mutual Fund.