Value Research Debt Fund Style

Wouldn't it be nice if at one glance you could know what your debt fund owns, how much risk it has taken on and where it stands vis-a-vis its peers? Value Research Fund Style (VRFS) for debt funds gives you a snapshot of all this without bothering you with complex data. Just like equity fund style, bond fund style is also a 3X3 matrix, which encapsulates a debt fund's interest rate sensitivity and portfolio credit quality. These are the two major risk factors that can affect a bond fund's performance. Interest rate sensitivity is measured by the fund's average maturity, which is a weighted average maturity of all the securities held by the fund. When interest rates move down, bond prices move up, thus boosting debt funds' returns. The oppo

This article was originally published on July 23, 2019.