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Is it a good idea to invest in BHARAT Bond FOF - April 2031?

If you are a long-term fixed-income investor, it might be a good investment option, suggests Dhirendra Kumar

Is it good to invest in the BHARAT Bond FOF - April 2031? Will its value decrease once interest rises in future?
- Rohit Saxena

For a fixed-income investor, the Bharat bond fund is good simply because it is a very high-quality fixed-income avenue with a debt of the highest rating. Although one shouldn't think that there is zero possibility of any credit instances here, of all options available in India, I feel this one turns out to be a particularly good quality bond portfolio.

With regard to the impact of rising interest rates on the fund, its value will go down if interest rates go up. But you will not lose money if you hold it till maturity because interim declines do not matter. I'm not very sure about its current yield, but whatever it is, if you buy at that yield and hold the fund till maturity, then given the configuration of this product, you will get that much return. Anything can happen in between like interest rates will go down and these bonds will go up in value and vice versa.
So, if you are a long-term fixed-income investor, it may be a good investment option. And since it will be held for over 10 years, I think it will provide you with a good post-tax return with reasonably low risk.

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