Debt mutual funds prosper in wake of Interim Budget yield decline

Gilt and dynamic fund investors reap nearly Rs 330 crore in gains, reveals estimates

The slump in yields after the Interim Budget has led to significant mark-to-market gains for debt fund investors. While gilt funds saw the value of their holdings surge by 0.65 per cent on average on Budget Day, the net asset value (NAV) of dynamic bond funds registered an average increase of 0.51 per cent, according to data from Value Research. The lower-than-anticipated borrowing plan announced in the Interim Budget (on February 1) led to an 8-basis-point decline in the 10-year government bond yield to 7.04 per cent on Thursday.

The debt market sentiment was buoyed by the government’s