What are Dynamic Term Funds? | How do Dynamic Term Funds Work? | Nippon India Mutual Fund
Nippon India Mutual Fund • 5 days ago
What This Video Is About
Dynamic term funds are a type of debt fund that provides flexibility to the fund manager to invest across different maturities of debt securities, based on factors such as interest rate environment and market outlook.
Major Ideas Discussed
- The fund manager can alter the portfolio's duration to manage interest rate exposure, taking into account the inverse relationship between bond prices and interest rates.
- Adjusting duration helps manage the portfolio's interest rate exposure, as securities with different durations respond differently to changes in interest rates.
- Dynamic term funds do not necessarily carry less risk than other debt funds, and can still be exposed to interest rate risk, credit risk, and other debt market risks.
- Investors should consider the scheme's portfolio, investment strategy, risk profile, and their own investment horizon before investing.
What to Watch Next
Investors should monitor interest rate changes, market outlook, and the fund's portfolio composition to make informed investment decisions.