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Benefit from Rate Cuts

Dynamic bond funds are best placed to benefit from rate cuts. SBI Dynamic Bond is a good choice in this category…

I want to invest Rs 3 lakh in mutual funds. I have shortlisted DWS Hybrid Fixed Term Series and SBI Dynamic Bond fund. Which would be the best selection from a 2-year point-of-view?
- P Baghi

The DWS Hybrid Fixed Term Series is a 3-year fund that allocates 20 per cent of its assets to equities. While this is a relatively low-risk strategy, it doesn't fit your investment timeframe of 2 years because it is a closed-end scheme. On the other hand, your second choice, SBI Dynamic Bond is an excellent fund. We might see rate cuts in the next couple of years, and such funds are best placed to benefit from them. Hence, you should invest your money in SBI Dynamic Bond fund.



This article was originally published on October 01, 2012.

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