Debt fund managers are advising investors to favour short-to-medium duration funds after the Reserve Bank of India (RBI) raised the repo rate by 25 basis points on Wednesday, arguing that bond markets have already priced in a large part of the expected tightening cycle. Fund managers expect another 50 bps of rate hikes over the next few months, but believe much of the adjustment in yields has already taken place. This, they said, has made the two-to-four-year segment particularly attractive, with yields of around 7.8-8% offering healthy accrual without taking excessive duration risk.