5 things to know about long duration debt mutual funds


1.The average maturity of long duration debt funds is more than 36 months.

2.These funds invest in government bonds, corporate bonds, treasury bills, and bonds issued by banks.

3.Long duration funds are sensitive to changes in interest rates and the fund NAV is positively impacted when interest rates drop and negatively impacted when interest rates rise.

4.Income Funds, gilt funds and dynamic bond funds are long duration debt funds.

5.Long duration funds have indexation benefits for investors who stay invested for at least three years, making it tax efficient for longer horizons.


Content on this page is courtesy Centre for Investment Education and Learning (CIEL).
Contributions by Girija Gadre, Arti Bhargava and Labdhi Mehta.



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