Bet for at least three years if you invest in corporate bond funds

Should you invest in corporate bond funds? 

If you are building a portfolio where the goal is more than three years away, you can invest in corporate bond funds for the debt portion of such a portfolio. This category of debt funds invests predominantly in bonds issued by corporates (and very little in government papers). 

Debt fund managers say you may invest in funds that have an average maturity of around three years. If you invest with a horizon of more than three years, you will be entitled to indexation benefit. Given the recent cases of defaults, be cautious about the credit quality of the portfolio. The bulk of the portfolio should be invested in papers having a credit rating of AA-plus and above.