The case for SIPs in debt funds

Timing is important in some categories of debt funds. So, why not use systematic investment plans (SIPs) to average out one's investment? Well, SIPs are not as good an idea for debt mutual funds as they are for equity funds because SIPs yield better returns than lump-sum investments only for those instruments which may see a dip during your investment period. What SIPs do is that they allow you to postpone your investments so that you can average out your costs if the markets tank after your initial entry point. The tendency of equity markets to subject you to capital losses after

This article was originally published on August 20, 2018.