Long duration bond funds are topping the return chart in one year. These schemes, which were hit badly by the RBI’s change in stance and liquidity crunch in the market, seem to be getting their mojo back. The long duration bond funds category is offering 20.03 per cent returns in one year, 9.81 per cent in three months, and 4.15 per cent in one month. Is it time for mutual fund investors to start betting on them?
For a long time, mutual fund managers cautioned the investors against these schemes. They believed that there was a lot of uncertainty in the market and that could impact these schemes adversely. However, things have changed in the last six months. “Most of the worries for the debt market have overturned in the last few months. Fed changed the outlook to dovish surprisingly, inflation came down and oil prices came down from 80 to now around 60 USD/ barrel. All of this has overturned the fortunes of the long duration debt schemes,” says Mahendra Jajoo, Head - Fixed Income - Mirae Asset Mutual Fund.
