Investors should focus only on debt funds with shorter maturity: Expert

Investors will need to exercise caution and be mindful of both interest rate and credit risks which could impact their portfolios

Debt funds have had a poor run last year with the spike in yields and expsoure of some mutual fund houses to IL&FS. The volatility in the movement of bond yields seen last year is expected to continue. 

The domestic inflation trajectory, political developments ahead of the national elections this year, the movement in global crude oil prices and global interest rates will be factors that would impact the Indian bond market, according to experts. Global central banks are expected to tighten liquidity, which may have a bearing on the Indian rupee, equities and bonds if foreign flows turn negative.

Investors will