Rates to rise; time to tap low-duration funds
Apr 07, 09:04

Interest rates in the economy are rising and the RBI may soon join forces by gradually raising key policy rates. In such times, investing in bonds that mature in less than one year duration makes sense. Low duration funds offer portfolios with six to twelve months duration.

Low duration funds generally invest in good quality bonds. As the portfolio gets redeployed sooner than most short duration funds, these funds help you benefit from the rising interest rates. The interest rate risk is low and hence they are less volatile compared to long term gilt funds. These schemes manage assets worth Rs 1.21 lakh crore as on February 28, 2022.

Keep Low Duration