However, that doesn’t mean these plans are shootout winners. There have been instances where fund managers have misjudged the RBI and suffered losses. In fact, variable funds lost their appeal after these schemes were hit by a bad money market and lack of a firm hint on interest rates in 2019. However, at least in theory it makes sense to have an expert take the call on interest rates. . In particular, central banks around the world are trying to control inflation by raising interest rates.
Many money market experts say interest rate hikes may be nearing an end and the RBI may pause hikes in the coming year. If that’s the case, 2023 could be extremely beneficial for debt mutual funds. These plans had a muted year of 2022.
In short, if you plan to invest for three to five years but don’t want to make a call on interest rates, you can bet on variable bond funds. Keep checking back for our monthly updates to see how your plans fared last month
The best flexible bond funds to invest in 2023
ETMuualFunds.com has used the following parameters to list debt mutual fund schemes.
Average returnsHe had rolled every day for the past three years.
Consistency Over the past three years: Hurst Exponent, H is used to calculate the consistency of a fund. The H exponent is a measure of the randomness of the fund’s NAV series. Funds with high H show lower volatility compared to funds with low H.
i) H = 0.5, the regression is said to be a geometric Brownian time series. This type of time series is difficult to predict.
iii) When H > 0.5, it is called continuous persistence. The larger the value of H, the stronger the trend of the series.
Low riskFor this measure, we have considered only negative responses to mutual fund schemes.
X = returns below zero
Y = sum of all squares of X
It is taken to calculate the ratio Z = Y/number of days
Low risk = square root of Z
ExcellenceCash return – Benchmark return. A daily rollup is used to calculate the fund’s return and benchmark and then the fund’s active return.
Asset Size: The initial asset size for debt funds is Rs 50.
(Disclaimer: Past performance is no guarantee of future performance.)