Mutual Fund Corner: Decoding current trends in debt mutual funds

In this latest episode of, ‘Mutual Fund Corner’, Joydeep Sen, Corporate Trainer & Author talked about debt mutual funds. He discussed the future outlook as well as if they are worth investing now.

Sen said, “For existing money just be invested - things will improve now, and for fresh money, yes, things will improve. If you compare with a bank deposit rate, if you compare with a good quality bank, like SBI, these numbers are competitive, even better than bank deposit rates. If you can hold for three years along with taxation indexation benefit, these numbers will outperform bank deposit rates. So, that is the logic and you can invest fresh money in debt funds now.”

He said, “Anything can happen - market can be volatile for some more time, but the message is at the end of the day, even if the market is volatile, even if yields move up a bit from now on, it will be there in the yield-to-maturity (YTM) and the YTM does not go anywhere it remains in the fund, maybe a few more months of volatility and things will improve.”