Mutual funds: Debt mutual fund investors can look into these 3 types of mutual funds with an imminent interest rate hike

Don’t be tempted to invest in long-term bond funds now.

Synopsis

The RBI did not raise rates, but experts say investors should stick to short-term debt funds. RBI chose to continue its efforts to support economic recovery while ignoring global monetary tightening and minimizing inflation.

The RBI took the bond market by surprise in its latest policy review, keeping key interest rates and policy stance unchanged despite multiple headwinds. This helped cool bond yields which had risen sharply after the February 1 budget announcement. The yield on benchmark 10-year government bonds, which was around 7% – a level last seen more than 30 months ago – is now around 6.7%. What should bond investors think of this

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Dolores W. Simon