Mutual Fund Update: Performance of debt funds in the year 2019
Debt funds have been in turmoil this year with the credit events on the rise. It all started with IL&FS being followed by DHFL and Essel group. Many debt fund investors were affected by the funds holding the papers of these groups. Let us have a look at the performance of debt funds in 2019.
| Category | 1-Year Returns |
| Long Duration | 10.31 |
| Medium to Long Duration | 6.63 |
| Medium Duration | 4.00 |
| Short Duration | 4.79 |
| Low Duration | 2.46 |
| Ultra-Short Duration | 6.68 |
| Liquid | 6.43 |
| Money Market | 7.87 |
| Overnight | 5.57 |
| Dynamic Bond | 6.55 |
| Corporate Bond | 8.05 |
| Credit Risk | 0.40 |
| Banking and PSU | 9.66 |
| Floater | 8.48 |
| FMP | 5.99 |
| Gilt | 8.82 |
| Gilt with 10-Year Constant Duration | 9.48 |
If we look at the past one-year performance, then credit risk funds are the ones that performed poorly among other debt funds. This was due to some credit events and most of the credit risk funds held such papers in question. However, as every coin has a flip side, the debt fund category is no different. Although there were funds like credit risk that did not perform well, long-duration funds performed better than any other fund in the debt category and were followed by banking & PSU and Gilt funds. This better performance was due to the constant fall in long-term interest rates.
The intention of this article is just an update as to how was the performance of the funds in the past year. It is always advisable to have a financial plan in place, which must be followed with discipline. The investments in mutual funds being made must be based on your risk assessment.