If you recently started moving from bank fixed deposits to debt funds, things might not look promising. Investors in debt funds that invest in long-term papers have begun seeing negative returns recently.
The reason: The rise in bond yields, and as the price and yields move in the opposite direction, the returns were impacted. In the past four months, the bond yields have been firming up for various reasons, including rising crude prices, the government saying that it would borrow an additional Rs 500 billion via bonds to fund its fiscal deficit, and so on.
