New Delhi, May 30 -- India's bond market is entering a more complex phase as rising crude oil prices, geopolitical uncertainty and inflation concerns reshape expectations around interest rates. Yet, despite the challenging backdrop, Axis Mutual Fund believes investors should resist the temptation to turn defensive and instead use periods of volatility to gradually build exposure to longer-duration fixed-income assets.

The fund house's latest fixed-income strategy note comes at a time when bond markets are trying to assess the implications of developments in the Middle East and their impact on inflation, growth and monetary policy. While oil prices remain elevated, recent hopes of a peace deal between the United States and Iran have provi...