Low returns from debt funds? Know how to manage this risk!
After Silicon Valley Bank revealed large losses on its US bond portfolio that had eaten into its capital, there’s been a lot of social media outrage. Some folks are shocked that banks can make losses on a cast-iron investment such as US treasuries. Others seem to be appalled that Silicon Valley Bank is not alone and that many other global banks are in the same boat. This shows that investors at large have only a vague understanding of what rising interest rates do to bond portfolios.
You have also been bombarding us with questions on how interest rate risks can play out for debt funds, particularly target maturity, constant maturity and gilt funds. We try to address them here.
Low returns from debt funds? Know how to manage this risk!
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Aarati Krishnan
Aarati is a leading voice in the Indian financial services space. She has been tracking and writing about the entire gamut of financial products and regulations for over 25 years now. She is currently Editorial Consultant for the Hindu Business Line and was earlier a consulting editor for Value Research Online. For her pioneering work in writing on financial services and the economy, she was awarded the Shriram Sanlam award for excellence in Financial Journalism thrice. LinkedIn | Twitter
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