How Do Dynamic Bond Mutual Funds Work?

Dynamic bond funds pool money from multiple investors to invest in a mix of debt instruments such as government securities, corporate bonds, and money market instruments. Fund managers analyse interest rate trends, macroeconomic conditions, and credit ratings to actively adjust the portfolio's duration.

The flexibility to shift between short and long-duration instruments helps these funds optimise returns, making them a compelling choice for investors seeking stability and moderate growth in the fixed-income space.