Dynamic Bond Funds

In November, nearly half the dynamic bond fund (DBF) schemes raised the allocation to medium-to-longer-duration papers

But these funds can underperform if the fund manager's calls go wrong

Opt for a mix of shorter-duration, target maturity, and dynamic bond funds

They outshine short-duration funds: Fund managers

For investors in bond funds, these strategies - better yields than inflation, reinvestment, barbell strategies, and credits - are where we see the best opportunities

Experts attribute renewed interest to robust returns, flexibility to curb downside

The key risk is that the fund manager may not always take the right calls

Long duration, gilt, and dynamic bond funds have outperformed in the 1-month and 3-month period

If your dynamic bond fund manager is still maintaining a high average maturity despite the recent spike in interest rates, it is because he expects rates to ease

New investors should opt largely for accrual-oriented funds which don't bet on interest rate movements