Debt funds remain good bets

May pip equity yet again in 2017; managers recommend funds focused on short-term bonds

Investors in debt mutual funds (MFs) have been a happy lot with the segment having outperformed equities for two straight years.
 
While the benchmark Sensex has remained flat over a two-year period, fixed income funds have generated annualised returns in excess of 10 per cent over the same time. With the government keeping a tight leash on spending in the Union Budget and hopes of rate cuts from the Reserve Bank of India (RBI), debt funds could again outperform equities in 2017, feel experts.
 
Although returns of debt mutual funds (MFs) may not match those of the last