Since the interest rates are going up, I want to discuss about long term debt investment.
Which is the better option for Long Term Debt Investment?
Can you please explain the pros and cons of GILT mutual funds vs BharatBond31.
Note1: Kindly ignore the point of liquidity issue in BhartaBond ETF because I am talking about long term debt investment.
Note2: I have taken Bharat Bond 31 as just an example, all I want to ask about is Long Term Bharat Bond.
by long term debt instruments I mean GILT fund like instruments which invest in long term govt bonds (10 years etc).
So since the interest rates are rising, I want to invest in these long terms bonds in order to lock in these hight interest rates for long term (around 10years).
And if interest rates fall after few years, I might be able to get good returns because of volatility caused by interest rate risk.
So according to what I know both GILT Mutual funds and BharatBond31 invests in long term bonds.
So I want to know which is better and why ?
Gilt funds are very volatile, you should be prepared for equity like volatility.
You should have some experience in the market both in equity and debt, to select gilt, along with the fact that you can afford to be unaffected by no returns for prolonged periods of time AKA opportunity cost.