Negative Returns in Debt Funds – What should be your investment strategy now?

Debt mutual funds are considered to be relatively less volatile than equity mutual funds. While this may be true, especially over a long time, the probability of negative returns cannot be ruled out in the shorter term. There are about 16 different categories of mutual fund schemes based largely on the maturity profile of their underlying securities. And, the average return in most of the debt funds in 2021 has been negative till date. Some of the debt fund categories are in negative territory for over the 3-month period as well. 

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