Why investing in well-diversified debt funds is a smarter choice

While portfolio concentration can boost the returns of equity funds, it offers no benefit in case of bond funds

Debt mutual funds have come under the scanner over the past one year — a rather disappointing one due to defaults by the Infrastructure Leasing and Financial Services (IL&FS) and others companies. Corporates have defaulted on their obligations towards mutual funds even in the past. Some of the names that come to mind are those of Ballarpur Industries, Amtek Auto, and Jindal Steel & Power. But the recent spate of defaults, including names like IL&FS, Zee Entertainment Enterprises, Dewan Housing Finance Corporation, Reliance-ADAG group companies and Altico capital, coming one after the other in quick succession, has awakened investors to