1. Dynamic bond funds are debt funds that do not have any restrictions on the duration or maturity of the debt securities they invest in.
3. The fund managers dynamically alter the allocation to long term bonds and short-term bonds basis their view on the interest rates to take advantage of the interest rate fluctuations.
4. They can hold both government and corporate securities of different durations.
5. These funds are moderate to high risk products, good for investors who do not track the interest rate movements and are investing for a 3 year plus investment horizon.
(Content on this page is courtesy Centre for Investment Education and Learning (CIEL). Contributions by Girija Gadre, Arti Bhargava and Labdhi Mehta.)