Riding the Interest Rate Cycle

I liked the way you explained dynamic bond funds in your earlier issue. But is it a wise thing to invest in them in the present market scenario? - Lakshya Vakharia

Editor Responds: Investing in dynamic bond funds is a risky affair. Although on paper it seems to be a good concept, in reality, it is quite difficult to predict the interest rate cycle. Therefore, if you are an aggressive investor with an investment horizon of over five years, considering dynamic bond funds is fine. Else, investing in target maturity funds and aligning them to your financial goals is a prudent thing to do.