Why you should avoid long-duration funds despite good one-year returns

Over the past one year, long-duration and gilt funds have given high double-digit returns. Nonetheless, experts do not suggest investing in these categories

The Reserve Bank of India (RBI), in its third bi-monthly monetary policy for 2019-20, reduced the repo rate by 35 basis points from 5.75 per cent to 5.40 per cent. Investors in debt funds need to recalibrate their debt fund strategy to the emerging interest-rate scenario. 

The latest rate cut has been prompted by slowing global and domestic economic growth. “The RBI expects inflation to remain below its target rate of 4 per cent for the rest of the year. With inflation under control, it is now looking to support growth, which has weakened considerably,” says R. Sivakumar, head-fixed income,