Target Maturity Funds

The 10-year benchmark yield stands at around 6.45%–6.55%, while longer maturities in the 13–15 year range offer yields of 6.86%–6.9%. This pickup over the benchmark makes it attractive, particularly as inflation stays contained and the RBI edges closer to a rate-cutting cycle.

Unlike open ended debt funds of other categories, target maturity funds help in locking the portfolio yield for a fixed period of duration without any significant volatility, if held till the maturity.