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Debt Fund Options

BNP Paribas Flexi Debt hasn’t been performing well. You can replace it with one of these options…

I am 40 and my mutual fund portfolio consists five funds that I have been investing in since 2008. My investments are in DSPBR Equity, HDFC Top 200, Quantum Long Term Equity, SBI Magnum Taxgain, and BNP Paribas Flexi Debt, which account for 10 per cent of my investment portfolio. I observe that my debt fund has had a poor rating over the last 6 months. Kindly suggest better debt fund options. I intend to hold it as a debt component for my portfolio, and the investment period would be minimum 3 years.
-Deepak S Ray

The equity funds in your portfolio are well-diversified and made up of high-rated funds with a proven track record and performance history. Magnum Taxgain, unfortunately, has not been a good performer. If you have a systematic investment plan (SIP) running in this fund, we suggest you discontinue it and instead invest in another equity linked savings scheme (ELSS). If it is an investment that was done a while back, then you just have to hold on till you complete three years. And unless you need the money, do not sell any units.

BNP Paribas Flexi Debt is an income fund which has not been faring well and it will be good if you can replace it with SBI Dynamic Bond or UTI Bond fund. Both these funds have a proven track record and performance history and will be a good substitute to consider.

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