Which debt fund category to choose for asset allocation?

Which category of debt funds is most suited for asset allocation between debt and equity? - S K Sharma Asset allocation is still an important consideration when investing in financial securities. While equity provides superior returns to investors over longer time periods, it is subject to volatility. Debt, on the other hand, can provide some portfolio stability while yielding lower returns. Relation between interest rates and returns Investors should be aware that changes in interest rates affect the returns of debt funds. There is an inverse relationship between bond prices and interest rates. When interest rates rise, bond prices fall, and bond prices go up when the interest rate regime is in a downward trajectory. The longer the duration of the debt fund, the more volatile they become in nature. Which debt fund category to choose? Within debt mutual funds, there are multiple options available in front of investors depending on their risk pr

This article was originally published on October 06, 2022.