Duration Fund

accrual funds

Accrual funds: a great contrarian bet

The widening spread between accrual funds’ YTM and repo rate offer an attractive entry at the moment. Based on valuations, sentiments and industry flows, accrual schemes make a good buy at this juncture. Historically we have seen that whenever the spread between YTM and repo rate has been high, accrual schemes have given good risk-adjusted returns …

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duration funds

Time to take a call on duration funds

Debt mutual funds, broadly, follow one of the two strategies. One type of fund aims to make money out of predicting interest rate movements. Accordingly, it will buy and sell securities to have a particular maturity date of the portfolio. This strategy is called duration strategy. The second type of fund aims to invest in …

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Debt Mutual Fund

Debt Mutual Fund: Duration Funds vs Accrual Funds

A debt mutual fund holds debt instruments, and these instruments pay a particular coupon (interest). An accrual strategy is holding a bond, earning the interest due, collect the principal at maturity and reinvest it in fresh bonds. Liquid funds, ultra-short term funds, short-term debt funds, income funds and credit opportunity funds primarily follow an accrual …

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