Longer-duration debt funds: Tactical bets are for high risk takers

Long-term investors who want near-certain returns may opt for a target maturity fund that invest in gilts

Debt fund categories that maintain high portfolio duration have performed well over the past year. Long-duration debt funds have given a category average return of 7.7 per cent. Gilt funds (whose duration can vary widely) earned 7 per cent while gilt funds with 10-year constant duration fetched 6.6 per cent. Given these returns, investors may be tempted to invest in them. They should first understand what they are getting into.

Good time to enter?

Experts say most major developed and emerging markets are at the end of their rate hike cycles. A couple of large central banks have or are