It’s not time for long duration bond funds yet
In short-term, long bond funds outperform only when the rates come down meaningfully
Things have improved for fixed income funds. The portfolio’s yield-to-maturity (YTM) mentioned in factsheets, has improved from the lows, two years ago. Now, debt fund YTMs even net of fund expenses are comparable with bank fixed deposits. So, the question is - whether it is the right time to move to long maturity bond funds. Before we answer that, let’s go through the basics.