Stick to safer categories, select a fund mix that suits your risk profile

Avoid venturing into funds whose average maturity exceeds three-four years

The 10-year bond yield has hardened by about 15 basis points over the past month. When this happens, the net asset value (NAVs) of funds having higher average maturity heads south, and investors who have put their money in them experience losses. In light of this development, investors need to reassess their debt portfolio to ensure they are not in funds where they may see high volatility.

What has caused the spike?

Three factors have caused the spike in 10-year government bond yields. One, the central and state governments together intend to borrow a massive Rs 22 trillion from the