With quantitative easing — the introduction of new money by central banks into the financial system — being reversed, yields are rising across the world. This trend is exerting pressure on yields in the Indian debt market as well. In this volatile scenario, one debt mutual fund option that investors can turn to is fixed maturity plans, popularly known as FMPs. These funds have the potential to offer steady and tax-efficient returns to investors even in a rising interest rate scenario.
Between 2014 and 2016, there was a rally in Indian bonds and the debt market gave excellent returns. But the