6 replies on this article “Birla Dynamic Bond Fund”

1. Sachin says:

   March 29, 2012 at 8:11 am

   Hi BanyanFA,

   You mentioned —
   “The returns on very short term funds would be much lower as their prices won’t fluctuate that much with interest rates as of mid-long duration bonds. The same goes with FMPs as well.”
   Did you calculated the inflation adjusted tax benefit that we get in case of FMP ?
   If we buy FMP now i.e. before 31-Mar-2012 and sell after 01-Apr-2013 you will get two years inflation adjusted tax benefit.

   Reply
2. ashal jauhari says:

   March 28, 2012 at 5:32 pm

   Dear Sha Faisal, Please do not target any return figure in your debt investments.

   Thanks

   Ashal

   Reply
3. BanyanFA says:

   March 28, 2012 at 2:41 pm

   Hi Faisal,
   I would rather like to first explain how a bond price works. The price of a bond is inversely proportionate to the RBI’s interest rate situation. If RBI reduces the interest rates, the prices of bonds go up. Hence in an upward interest rate cycle, bond prices will reduce and show such mutual funds would show negative returns. However, the situation now is that the interest rates are at their peak and the only course which they can take is go down. I am very hopeful that interest rates in next couple of quarters would be lower than now. If that happens, the bond prices will shoot up and the Bond mutual funds would show postive returns.

   Hence, your 1 year investment period is seems quite adequate for investment into BSL Dynamic Bond fund. The returns on very short term funds would be much lower as their prices won’t fluctuate that much with interest rates as of mid-long duration bonds. The same goes with FMPs as well.

   Regards
   BFA

   Reply
4. Sachin says:

   March 28, 2012 at 4:20 am

   Also check for FMP’s. As your horizon is 1+ year. You will get good tax advantage in FMP.

   Reply
5. rmohan80@gmail.com says:

   March 27, 2012 at 11:17 pm

   Hi,

   BSL Dynamic Bond Fund is definitely a good option and you can maybe expect around 10% return in 1 year (around 2000 to 2500)

   However since your timeframe is 1 year as indicated by you in the question, I suggest going for BSL Ultra Short-term fund. Returns may not be as high as the bond fund, but risk is also less

   Thanks,

   Ram

   Reply
   1. sha faisal says:

      March 29, 2012 at 6:43 am

      @ all:

      Thanks for your inputs.

      Regards,
      Faisal.

      Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.