Dynamic Bond Funds are the category of Debt funds that if timed right can match Equity returns. – Mr. Yogendra Shah – Head Advisory, SNMA Wealth article on Dynamic Bond Funds Published in Hindustan Times- NOIDA Edition on 22 Sept 2022.
Dynamic bond funds can help navigate through the impact of interest rate cycles.
While investing, it is always advisable to invest in a mix of Equities, Debt, Gold, and other investment avenues. Choose as per individual financial goals, investment horizon, and risk tolerance. For Debt Allocation purposes, investors have a variety of debt mutual funds on offer from which they can choose. However, one aspect that investors should always look for in any debt investment is Liquidity, Safety, and then Returns.
The most important thing is to get this right. Considering various options available, the investor needs to choose the most suited fund and if the investor is willing to stay invested for Long Duration, then the Dynamic Bond fund can be considered.
There is considerable uncertainty about how interest rates will move at any point in time. And it is difficult for a common man to keep an eye on all the key events, and react accordingly. Hence, the Dynamic Bond Fund offers a good option to manage bonds as per the interest rate cycle and to help generate higher returns in the long run.
However, Dynamic Bond funds can be very volatile in the short run and if the need is to get a stable and consistent return, this might not be your investment.
