Dynamic funds can give higher returns than short-term debt funds but they come with higher risk as well. Buy these funds only if you can stomach the volatility
If dynamic bond funds are meant to be managed dynamically—they increase their duration when interest rates fall and reduce it when interest rates rise—why have most of them lost out in the past 12-14 months? On an average, dynamic bond funds have lost 0.21% from November 2016 till date, when rates have risen. Short-term income funds returned 4.72%, in comparison. Are dynamic bond funds dead or is this just a temporary phase?