Referring to "interest rate sensitivity" in the fund style of debt funds, you have often said that gilt funds are liable to change with RBI interest rate changes. When you say so, are you referring to a change in CRR or a change in repo & reverse repo rates? What are the criteria for deciding the type of debt funds in which a person should invest, especially via SIPs for long-term wealth creation?
Value Research's Bond Fund Style matrix is a summary of bond portfolio characteristics. The summary gives a snapshot of the credit risk as well as the interest rate risk being borne by a bond fund without bothering to look at the complex data.
Gilt funds are highly sensitive to interest rate risk. A change in CRR or repo and reverse repo rate affects their prices, as demand changes. Thus, the rate outlook drives the demand and prices of bonds.
Coming to your second query, fixed income investment is not a suited vehicle for long-term wealth creation. Equity, even though it is more volatile, is considered more suitable to build wealth. Investing in a equity fund via SIPs is recommended. Fixed income investment can be one time investments for risk-averse investors. The choice of funds depends on your investment time frame based on your needs. A fixed income allocation plays an important role in a long-term portfolio to provide stability and ensure discipline for rebalancing.
However, as you are looking for a bond fund for the long-term, we suggest well-rated income funds like Birla Sun Life Dynamic Bond Fund, Kotak Flexi Debt Fund, Fortis Flexi Debt Fund or IDFC dynamic Bond Fund.