Should You Invest in Long-Term Debt Funds?

Relationship between Bond Yield and Bond Price

Your plan to create long-term wealth might get hindered due to the volatile nature of the equity market. But, if you want to avoid the market instabilities of equities and are a risk-averse investor, consider parking your funds in long-term debtoriented mutual fund schemes. Vardan Pandhare analyses the opportunities present in long-term debt funds in this special report

If you have been an active investor in recent months, you have most likely come across numerous headlines on popular finance portals proclaiming that long-term Debt Funds can deliver double-digit returns going ahead. While these articles do catch your attention, they often fail to address the fundamental question about whether you should invest in long-term debt funds. Most of the information available regarding long-term debt funds only mentions that a drop in interest rates leads to a decline in bond yields, thereby increasing bond prices.