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Risk/reward of long duration has mutual fund managers on the fence

50% of dynamic bond funds' average maturity at less than 5.5 years, the rest higher

stock market, market, stock brokers
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Abhishek Kumar Mumbai

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With the Reserve Bank of India (RBI) placing the interest rate-hike cycle on pause, is it the right time to shift debt allocation to longer-duration papers?

Mutual fund (MF) managers are on the fence.

At the end of March, half the dynamic bond fund (DBF) schemes had an average maturity of less than 5.5 years. The rest had gone long on duration, with an average maturity of over 5.5 years.

DBFs are debt MF schemes similar in concept to flexi-cap funds in the equity space. DBF managers have the flexibility to switch allocations between shorter and longer maturity papers, depending

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First Published: Apr 24 2023 | 6:01 AM IST

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