I want to invest in short term debt funds as they have lower credit risk and interest risk compared to medium/long term or dynamic bond funds. Should I invest in short term debt funds with an investment horizon of 5-10 years?
There is no harm, it is just a risk-based decision esp constituents.
So 2 and 10yr Govt bond wont make a difference ( because of sovereignty ) but corporate bond, yes. I wont buy 10yr bonds for corporate, maybe something like upto 1 year.
interest fluctuations are relatively lesser for shorter TF instruments.
Short-term have less fluctuation while LT have more of it. Also I consider pledge angle, it gives extra benefit so i avoid something that can’t be pledged.