Don't put your money in last year's winners while investing in debt funds

The bulk of your portfolio should be in funds that avoid both credit and duration risk

Investing in the past year’s winner is a loser’s strategy in any category of mutual funds, but it can be especially harmful in debt funds. Long-duration funds were the best-performing category on the debt side over the past year with an average return of 12.13 per cent. However, if you are thinking of investing in this category to partake of those returns, perish the thought. As market conditions change, you could well end up with losses in these funds.

Direction of rates uncertain: Fund managers today have differing views on where interest rates are headed. Some believe longer-term bond yields