Dynamic bond funds see six-fold jump in net inflows at over Rs 2,000 cr

Experts attribute renewed interest to robust returns, flexibility to curb downside

Dynamic bond funds, a debt category, largely shunned by mutual fund (MF) investors, saw a sharp revival in flows in July. The category saw a sixfold jump in net inflows to over Rs 2,000 crore —the highest collection since April 2019 when category-wise break-up of flows was first disclosed. 

The last 12-month average flow for the category has been negative, at Rs 2,193 crore.

Experts say investors are opting for these funds because of robust returns, which has come on the back of a favourable duration play as yields in the bond markets have softened.

“Investors are looking at two things right now