The demonetisation scheme of the government, which is seen as disinflationary, has strengthened the case for investing in debt mutual funds that invest in long-term government securities. Fund managers are betting that lower inflation will lead to quicker rate cuts by Reserve Bank of India (RBI).
"For the debt component of the portfolio, we advise investors to increase their allocation to long-term funds from 33% to 50%," says Vishal Dhawan, chief financial planner, Plan Ahead Wealt ..