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POSTED BY ON January 29, 2013 11:58 am COMMENTS (6)
Most of the debt funds I see are speciality funds like long term, short term liquid etc. Is there any diversified debt fund where fund manager has the flexibility to change the maturity periods based on market. For such funds what is the category on value research online I should check? As debt returns are cyclical in nature the churn will be more if we have to manage the maturity profile of the fund we are investing regularly. (Lack of expertise may create more mistakes ).
Choosing a debt fund is so difficult compared to choosing an equity fund 🙁
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NSC and FDs are not tax efficient for me. PPF is an option. I need to open an account. So far I was avoiding PPF due to its long lock in period. I invest around 10K per month each in HDFC high interest fund and reliance Dynamic Bond fund and contribute around 2L to EPF (including employers contribution). Another reason for avoiding PPF is this -already 50% of my debt portfolio is locked with EPF for long term. These SIPs will continue till I am doing a job and i dont foresee any planned redemption for many years. I am planning to open PPF account this year but even after that I will be putting more than 10K per month in debt funds.
I am sure I can do better with my debt fund selection as both the funds I invest are not really high ranked though the difference in performance is not really much from the high ranked funds over 1 year period and 5 year period.
Dear KKK, in the light of your detailed reply, my take please do not try to fine tune your debt fund investments. Please do not open PPF accct. in your name, open it in the name of a non earning family member, like your wife or kid.
As you are saying performance of these funds is in line as per the top quartile, you should continue in these funds itself. Redeeming every now & then from 1 debt fund to another, ‘ll not be tax & return friendly to you.
Thanks
Ashal
Dear kkk, yes choosing a debt fund is far more difficult than an Eq. fund. Please check the 2 funds discussed by dear Ramesh. Based upon time frame & tax slab, long term FDs of banks can also be given a try. Although not tax efficient but you know your entry & exit point & possibly return.
Thanks
Ashal
Did you look into PPF / 10 year NSCs as one of the best Debt instruments around ?
How about SBI Dynamic Bond fund?
So far I am satisfied with this.
Templeton India Income Opportunities fund.
Birla Dynamic Bond fund.
Mainly, any fund with those keywords. But do check the specific Scheme Information Document of the specific funds.