Medium-term Bond Funds: Safe Haven.

(From Financial Express)

This category just didn't exist six years ago. Today, bond funds have clearly emerged as the staple of any fixed income investors portfolio. An investor's preference shows in number as these funds account for nearly a quarter of total assets managed by funds in India. What has caused this phenomenal rise? The core of these funds is the relative return stability, high liquidity and tax efficiency. And as a bonus in recent years was the successive rate cuts in the past few years. On top of that, during a crumbling equity market - when investors were running for cover - these funds proved to be a safe haven for risk-averse investors. This turned out to be a boon for most of the category entrants. Though this increased activity has pushed bond prices …