Go for the flexibility of dynamic bond funds if you are unsure about direction of rates
If you are unsure about where rates are headed over the next year, go for dynamic bond funds
Investors who don't want to take interest-rate risk may avoid these funds
In November, nearly half the dynamic bond fund (DBF) schemes raised the allocation to medium-to-longer-duration papers
But these funds can underperform if the fund manager's calls go wrong
Opt for a mix of shorter-duration, target maturity, and dynamic bond funds
They outshine short-duration funds: Fund managers
For investors in bond funds, these strategies - better yields than inflation, reinvestment, barbell strategies, and credits - are where we see the best opportunities
Experts attribute renewed interest to robust returns, flexibility to curb downside
The key risk is that the fund manager may not always take the right calls
Long duration, gilt, and dynamic bond funds have outperformed in the 1-month and 3-month period
If your dynamic bond fund manager is still maintaining a high average maturity despite the recent spike in interest rates, it is because he expects rates to ease
New investors should opt largely for accrual-oriented funds which don't bet on interest rate movements