Dejargoned: Duration and accrual strategies

Debt funds, broadly, follow one of the two strategies. One type of fund aims to make money out of predicting interest rate movements. Accordingly, it will buy and sell securities to have a particular maturity date of the portfolio. This strategy is called duration strategy. The second type of fund aims to invest in companies that have a lower credit rating but are well-managed. The intent here is to buy those companies where the fund manager expects credit ratings to improve, which will hopefully lead its price to go up and benefit the fund. 

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