In its ‘Fixed Income Market Review and Outlook April 2026’, Axis Mutual Fund highlights the impact of the ongoing conflict in West Asia on global bond yields and inflation. The fund recommends a barbell strategy that combines short-term bonds for liquidity with long-duration bonds for potential gains. It suggests investors focus on 2-year AA-rated corporate bonds for steady income and long-term government securities for tactical opportunities. For those with a 2–3-year investment horizon, a short to medium duration, accrual-oriented approach is advised, complemented by Income Plus Arbitrage strategies to enhance stability and tax efficiency. The report also warns of risks, including sustained high crude oil prices, which could lead to inflationary pressures and potential rate hikes by the Reserve Bank of India (RBI). Despite these challenges, Axis MF believes that emerging economies like India, while not immune to global pressures, are better positioned due to strong macro fundamentals.