Investors need to adopt a barbell strategy for debt-oriented funds: Experts

Keep bulk of your portfolio in low-risk funds; chase returns in residual portion if you have the capacity

Yields on government securities (G-Secs) spiked on Tuesday — the 5-year G-Sec closed at 5.84 per cent (compared to its calendar-year low of 5.50 per cent); the 10-year bond touched 6.18 cent (CY low: 5.97 per cent); and the 15-year bond rose to 6.81 per cent (CY low: 6.58 per cent). These figures have moderated slightly in the past two days. But with yields under pressure, investors need to modify their debt fund strategy.

Short-term spike

Two factors caused the spike: The exclusion of popularly traded securities in the Reserve Bank of India’s (RBI’s) Government Securities Acquisition Programme (GSAP) auction,