Insurance planning services in India

These funds aim at the twin benefits of high accrual income and capital appreciation when yields start coming down. AAA-rated bonds in the medium-term segment offer around 9.75 per cent, which is almost 150 basis points (bps) more than what they used to offer around six months ago. Towards the end of the financial year, the  typically witnesses tight  situation and rates remain firm.

This offers a good opportunity for these schemes to lock-in their corpus in attractive yields, say experts. "If yields fall by 50 basis points in the next year, you may see 2 per cent capital appreciation on the investment portfolio, which should  that investors take home around 10 per cent returns," explains Alam. If the fund manager opts for AA and A rated bonds, the returns can be even more, though it comes with an extra risk.