'When interest rates rise, the NAVs of these funds will fall.' However, they won't fall as much as longer-duration funds.
Besides high portfolio yield, investors may enjoy capital gains in debt funds in 2023 as bonds rally in anticipation of rate cuts.
In 2021, there is the risk of interest rates spiking. Investors should tackle duration risk with a longer investment horizon, suggests Sanjay Kumar Singh.
The financial services sector, including NBFCs and housing finance companies (HFCs), have historically been the largest borrowers from MFs.
In September, net equity inflows stood at Rs 6,609 crore, compared to Rs 9,152 crore in the previous month. In the last four months, this is the lowest net inflow tally seen by the equity category.
If you are in credit opportunity funds, income funds or dynamic bond funds for a long-term goal, stay put.
Nearly three-fourths of the debt money, as of April 30, 2019, was invested in securities with duration of less than three years.
Because of local and global problems, inflation pressures may continue, helping these schemes perform better.
RBI awaits fiscal stance, inflation to cool off to decide on rates.
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