Debt funds have been out of favour for close to two years now. But with equity markets turning volatile, yields rising, and the rate hike cycle forecasted to near its end debt funds may again draw investors’ attention.
The yield-to-maturity (YTM) of debt funds have been rising steadily for almost a year. At the end of January, the YTMs of popular medium-term debt schemes like corporate bond funds and short-duration funds touched an average of 7.5 per cent, which is the highest since Covid’s outbreak.
