Choosing a dynamic bond fund? Here's a quick guide

Which are the best dynamic bond funds?

We believe that a debt-fund investor broadly has two needs:

• To park their short-term money to preserve capital which gets fulfilled by - liquid funds.
  
• And to get predictable income without much volatility - short-duration funds. For most investors, short-duration funds are a safer bet, providing stability and consistent returns.

If you still want to invest in dynamic bond funds, analyse the fund on the basis of how well they have managed to navigate interest rate cycles. Also, the portfolio complexion should also be looked at in terms of credit quality.

We looked at the top 10 funds by AUM (since that is where investor interest lies) and among these noteworthy are of ICICI, Kotak and SBI. Among these ICICI is the biggest and most diversified fund, with the most number of securities. However, it also boasts a riskier portfolio in terms of credit quality.

Conclusion

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Also read:
How to select a debt fund?
Where to invest for the short term?