YES Bank, IL&FS scams keep debt fund investors on edge. What's the way out?

Their tolerance to NAV fluctuations has been tested once too often. Opt for high-quality, low-risk portfolios

“One should develop tolerance to net asset value (NAV) fluctuation. Sticking to fund houses that have seen several cycles and can ride through the marginal ups and downs, including noise levels, would be a good strategy,” says A Balasubramanian, chief executive officer, Birla Sun Life Mutual Fund. And investors’ tolerance to NAV fluctuation has been tested on several occasions in the past 18 months. For example: After the Reserve Bank of India superseded the YES Bank board and decided to write-off additional tier one (AT-1) bonds, five schemes of Nippon India saw their NAVs fall 9 per cent to 25