When Do Dynamic Bond Funds Make Sense For Investments?

Dynamic Bond Funds

The interest rate movement in the stock market influences the returns of a bond  fund. When interest rates go down, long-duration bond funds are benefited the most. Whereas, when interest rates are rising, these funds are not fruitful.  

Factors such as inflation, government borrowings, RBI’s monetary policy, etc. explain the interest rate movement which is required to be understood before investing in bonds. And for those, who can’t apprehend interest rate movements should invest in dynamic bond funds as they are open-ended debt schemes that invest in securities of varying maturities. They are sensible in the case where a  moderate to high-risk appetite investors can enjoy the interest cycles. 

Riding the interest rate cycles 
Dynamic bond fund managers proactively manage the interest rate movement. They lively move investments between long-term and short-term bonds to surge or drop the portfolio’s maturity for sorting advantage of fluctuations in interest rates to sail through volatility swiftly. If a fund manager anticipates an increase in interest rate, the manager may sell long-term securities and invest in short-term maturity papers for the welfare of the portfolios.  

Moderate to high-risk appetite
The investors must invest for a time horizon of 3+ years. These funds are advocated for the moderate to high-risk profile investors due to the interest rate movement.  

Things to Remember 

1. Focused credit quality: On the credit side, MyFinopedia suggests opting for AA+ and above-rated Dynamic Bonds. 

2. Disciplined monitoring: MyFinopedia keeps an eye on the performance of dynamic bond funds regularly on monthly basis.

Let’s Learn All About Fixed Maturity Plan !

Please follow and like us:
(SCSS) Senior Citizens Savings Scheme: Tax Benefit & Features

(SCSS) Senior Citizens Savings Scheme: Tax Benefit & Features

Retirement Planning Tax Saving
A savings program designed for older citizens over 60s in India is usually called the Senior Citizens Savings Scheme (SCSS)....
Read More
Today’s Stocks Market Updates (25 January 2023)

Today’s Stocks Market Updates (25 January 2023)

Market Update
VALUATIONS SENSEX PE Ratio 22.82 NIFTY PE Ratio 21.19 Source: NSE and BSE BSE SENSEX60205.06 -773.69-1.27%NIFTY 5017892.00 -226.30-1.25%NIFTY Bank41647.70 -1085.70-2.54%BSE...
Read More
(NPS) National Pension System: Benefits, Interest Rate and Eligibility

(NPS) National Pension System: Benefits, Interest Rate and Eligibility

Investing Pension Tax Saving
A public defined contribution retirement savings plan is known as a National Pension System (NPS). The NPS wants to encourage...
Read More
Today’s Stocks Market Updates (24 January 2023)

Today’s Stocks Market Updates (24 January 2023)

Market Update
VALUATIONS SENSEX PE Ratio 23.13 NIFTY PE Ratio 21.49 Source: NSE and BSE BSE SENSEX60978.75 37.080.06%NIFTY 5018118.30 -0.200.00%NIFTY Bank42733.40 -87.90-0.21%BSE...
Read More
(Equity Linked Savings Scheme) ELSS Funds: Meaning, Full Form & Interest Rate

(Equity Linked Savings Scheme) ELSS Funds: Meaning, Full Form & Interest Rate

Investing Mutual Funds Tax Saving
If you are a beginner investor, ELSS is the greatest choice since it offers tax benefits, gives you a taste...
Read More
Today’s Stocks Market Updates (23 January 2023)

Today’s Stocks Market Updates (23 January 2023)

Market Update
VALUATIONS SENSEX PE Ratio 23.17 NIFTY PE Ratio 21.60 Source: NSE and BSE BSE SENSEX60941.67 +319.90+0.53%NIFTY 5018118.50 +90.80+0.50%NIFTY Bank42821.30 +314.50+0.74%BSE...
Read More
National Savings Certificate (NSC): All Features & Tax Benefits

National Savings Certificate (NSC): All Features & Tax Benefits

Investing Tax Saving
NSCs, or National Savings Certificates, can be used as security for bank loans. According to Section 80C of the Income...
Read More
Today’s Stocks Market Updates (20 January 2023)

Today’s Stocks Market Updates (20 January 2023)

Market Update
VALUATIONS SENSEX PE Ratio 23.43 NIFTY PE Ratio 21.46 Source: NSE and BSE BSE SENSEX60621.77 -236.66-0.39%NIFTY 5018027.70 -80.10-0.44%NIFTY Bank42506.80 178.000.42%BSE...
Read More
Deductions Under Section 80D- Benefits & Works

Deductions Under Section 80D- Benefits & Works

Finance and Economy Tax Saving
Meaning & Benefits of Section 80D:-  A, Definition and key goals of section 80 D:- Budget 2018 increased the deduction...
Read More
1 2 3 32
Social media & sharing icons powered by UltimatelySocial