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  • Business Standard

Fixed-income investors should opt for short, medium-term bonds: Here is why

Fixed income investors should consider short and medium-term investment grade bonds with yields above 8% in the current market environment, according to the wealth management and advisory arm of Emkay Global Financial Services.

A short term bond fund is a debt mutual fund that normally invests in short term debt instruments with a maturity of up to 3 years. These funds will typically invest in Certificates of Deposit (CD), Commercial Paper (CP) and government securities with a residual maturity of less than 3 years. Of course,

A medium term fund sits between short-term and long-term debt funds. Its underlying duration has to be around 3-4 years. If you have a similar time frame, a medium-term bond fund is meant for you. Historically, these funds also hold some securities with slightly lesser-rated securities.

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