Business News›Prime›Markets›Long-bond funds have underperformed. Will they become the best bet for investors now?

Invest with Confidence. Lead with Insights.

Drench in the knowledge with exclusive insights, ePaper & smart market tools with ETPrime.

START YOUR MEMBERSHIP

Investing

Long-bond funds have underperformed. Will they become the best bet for investors now?

Getty Images

India’s fiscal situation and inflation trajectory remain much more benign and create an opportunity to own long bonds.

Synopsis
Expensive valuations and lingering risk factors such as rising crude oil prices and the firming dollar index have impacted equities. However, bonds are finding favour among investors. The recent optimism was particularly fuelled by the inclusion of India’s government bonds into global indices. Should one choose long-bond mutual funds when the outlook on interest rates remains hazy?

At a time when benchmark equity indices have fallen from their lifetime highs hit on September 15, mutual fund houses have stepped up their purchases of long-term bonds in the past few days. Over the last one year, the AUM (assets under management) of Nippon Lakshya Nivesh, which invests in extreme long bonds, has gone up from INR2,094 crore in August 2022 to INR6,348 crore as on August end this year indicating that investors are also taking