Rising yields boost appeal of low tenure debt funds, say experts

On Wednesday, the yield of 10-year G-Sec was trading at 6.88 per cent

Yields on government securities have risen over the past two days as the Centre increased the fiscal deficit target and borrowing target for the next fiscal year. Amid expectations of yields to inch up further over the next few months, investors should invest in lower duration funds and target maturity funds, according to fund managers.

The Budget 2022-23 has continued its focus on supporting growth through higher capital expenditure. The fiscal deficit estimates of 6.4 per cent of gross domestic product (GDP) in FY23 and 6.9 per cent of GDP in FY22, both turned out to be slightly higher than market