Tipping Point: Returns of longer-duration funds have perked up recently

Keep 20-30% of debt fund exposure in dynamic bond funds

The returns of longer-duration funds, which were looking very anemic until recently, have perked up recently. It’s because interest rates have softened a little. It could prove a little premature and risky to take exposure to longer-duration funds in anticipation of a decline in rates. Keep 20-30 per cent of debt fund exposure in dynamic bond funds.