Should you invest in dynamic bond funds? These funds have managed to give decent returns over the past one year. Even their longer-term track record over five years is reasonably good. These are the go-anywhere funds within the debt category. Their fund managers have the mandate to take both duration and credit risk to earn higher returns.
On the positive side, it makes these funds flexible and adaptable. When interest rates are set to fall, they increase the duration to benefit from them. After they have fallen, fund managers reduce duration. The risk within this category is that ...
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