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Rearview mirror investing can be perilous in floating-rate funds

Investors should opt for them when rates are expected to climb, not now when they are largely over

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4 min read Last Updated : Sep 18 2023 | 10:59 PM IST

With a category average return of 7.53 per cent (for direct plans), floating-rate fund is the best-performing debt fund category over the one-year period. Thirteen funds within this category manage assets under management (AUM) of Rs 63,267 crore. The advice that investors should not go by past returns is especially pertinent to this category.

How do they work?

According to the Securities and Exchange Board of India’s (Sebi) definition, floating-rate funds must invest at least 65 per cent of their portfolios in floating-rate instruments. “These could be government securities (G-Secs) and corporate bonds. Floating-rate securities are bonds that have a

Topics : SEBI Reserve Bank of India debt fund investments Sebi norms floating rate bonds

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