Please note that past returns from a fund are not guaranteed. The performance of debt mutual fund schemes predominantly depends on the interest rate scenario in the economy. Most of the debt or debt-oriented mutual funds tend to outperform in a falling interest rate scenario. However, vice-versa is also true. In the context of the Indian economy, interest rates have been falling for the last year and therefore several debt schemes (especially Long Duration Funds, Gilt Funds, etc.) have generated good returns. However, there is no major scope left for a significant rate reduction in the future and therefore debt investors are recommended to invest in shorter duration debt schemes. Debt mutual funds have a tendency to provide a marginally higher (post-tax) return over the conventional term deposit products.
Please note that past returns from a fund are not guaranteed. The performance of debt mutual fund schemes predominantly depends on the interest rate scenario in the economy. Most of the debt or debt-oriented mutual funds tend to outperform in a falling interest rate scenario. However, vice-versa is also true. In the context of the Indian economy, interest rates have been falling for the last year and therefore several debt schemes (especially Long Duration Funds, Gilt Funds, etc.) have generated good returns. However, there is no major scope left for a significant rate reduction in the future and therefore debt investors are recommended to invest in shorter duration debt schemes. Debt mutual funds have a tendency to provide a marginally higher (post-tax) return over the conventional term deposit products.