Don’t dump long-term debt schemes, say mutual fund managers

The benchmark government bond yield crossed the 14-month-high of 7 per cent on Tuesday amid inflationary concerns in the market. Many experts believe that the rising inflation might dim the chances of another rate cut in this financial year. A 'no-rate-cut' scenario is a bad news for long-term bond fund investors. Also, higher yields mean lower returns from debt mutual funds, especially long-term debt funds. Though experts have been asking debt mutual fund investors to stay away from long duration funds in the last one year, the big question is: is it time to give up on them totally?

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