Rearview mirror investing can be perilous in floating-rate funds
Last Update Date: 06-10-2026
Published by Business Standard
Abhishek Kumar's role: Quoted
Abhishek Kumar said getting the interest rate cycle right is key with these funds. He explained that once the RBI brings inflation under control and stops raising rates, the cycle turns against them.
More of Abhishek's views on mutual funds
The article looks at floating-rate debt funds and warns against picking them on recent performance alone. It explains how these funds hold variable-coupon bonds or use interest rate swaps, why gains from rate hikes reach them with a lag, and why they tend to struggle when rates fall. It also notes the view that the rate hike cycle is largely over.
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Rearview mirror investing can be perilous in floating-rate funds