Finance Mutual Funds

Dynamic Bond Mutual Funds

A recent rave in the ever-changing investment landscape is dynamic bond mutual funds. Find out what it means, the benefits, features, and whether or not you should include it in your portfolio. Here, professional business coach, Shamir Kumar Nandy walks you through everything you need to know about dynamic bond mutual funds.

What are  Dynamic Bond Mutual Funds?

Dynamic mutual funds just like the name implies are “dynamic. This means it is active trading on securities based on the fluctuations of the interest rates. While the dynamic bond mutual fund is a class of debt fund under government securities. They come with a different dynamic approach.

Here is how it goes:

A dynamic mutual fund is more open-ended debt mutual fund. The fund manager “dynamically” trade various instruments of any duration according to the anticipated changes in the interest rates. This is quite different from other types of debt funds like 10-year gilt funds which already have a 10 year fixed maturity duration.

“Bond funds are greatly influenced by the interest rates in the market. For instance, if the interest rates go down, the long duration bond funds benefit the most and when it goes down, the long duration bond funds take the hardest hit,”  Shamir Kumar Nandy explains.

Hence, the fund manager is able to take advantage of the volatility of the bond market scenario as he can always switch from short term debts to long term duration debt. The entire movement and decision depend on the fund manager working to benefit from market appreciation.

What are the features and benefits of  Dynamic Bond Mutual Funds?

Fund managers play a key role

The fund manager plays a crucial role in the dynamic bond mutual fund and its decision can either yield a high return or loss. His/her ability to make the right choice during those market changes and interest rate cycles matters a lot.

Asset allocation is dynamic

As said earlier, dynamic funds are dynamic-that is they are flexible. This means there is no restriction in investment across various securities. The fund manager does not have to follow any investment mandate. Rather, there is the freedom to invest in securities of different duration.

Based on the interest rate movement

“Dynamic bond mutual funds are all about navigating a fluctuating interest rate scenarios. Bond markets are generally affected by the interest rate. The fall in the interest rate is a win for bonds. While a rise in the interest rate can lead to a loss in bonds. This means if interest rates fall in the short term, the fund manager can divert to the long term in order to minimize risk” says  Shamir Kumar. “ Holding of different securities duration will not only help minimize risk but also generate income returns” he adds.

Risk factors

Dynamic bond funds are a class of debt instrument associated with low risk. Plus, risk can be minimised with the duration strategy being employed. However, they still carry a certain degree of risk and can be regarded as a moderately high one. This is because the interest rates can do up and down sharply and it can lead to a loss. Besides, it is like an investor is betting on the fund manager’s ability to make the right decision in altering the portfolio.

Macroeconomic risk

The interest rate and returns can be influenced by macroeconomic factors as well. This include changes in government policies, currency rates, oil and gas prices and many more. Investing in long term tenure in order to minimise short-term risks is the way to go.

Should you invest in  Dynamic Bond Mutual Funds?

Dynamic bond mutual funds are riskier when it comes to debt fund categories. Therefore, a conservative investor who wants to generate lower returns might find it a bit risky. And any investor who is not ready to lay bets on the fund manager’s ability can stay away from dynamic bond mutual funds.

Moreover, “it is better not to go for dynamic mutual funds if your investment life span falls below 3-5 years. Long duration investment is more volatile but they can generate good returns” Shamir Kumar Nandy advises. Again, when it comes to investing in dynamic bond mutual funds, it all depends on your risk tolerance and investment goals.


Shamir Kumar Nandy Guide to Managing Your Credit Card

A lot of advantages that come with credit cards lead us into its overuse. However, the fact that credit cards make our finances easier doesn’t mean we shouldn’t tread carefully. The effective management of credit cards can sometimes be overwhelming and complicated. “Proper budgeting, spending responsibly and sticking to a strategy can make the use of credit cards easier,”  Shamir Kumar Nandy, a renowned business coach says. Moreover, paying bills on time can reduce accumulated interest.

One of the things we are best at as humans are spending the money we haven’t earned. The wake of covid 19 brings about an economic meltdown. Research says that the use of credit cards was at an all-time high and this led to a plunge into debts. Hence, as a credit card is a lifesaver it also can be the death penalty. Here,   Shamir Kumar Nandy provides tips for managing your credit cards.

On-time payment of credit bills

Trying to meet up with the due date on your credit card statement every month needs a lot of discipline. Therefore, launching a plan to cut down your credit card debt should be your primary goal. There is a date that shows up on your statement every month, it is called the due date. At that date, you are required to pay your outstanding credit card bills, which is every month. “While you might be tempted to pay a minimum amount because it is allowed, paying in full is the best bet. This way, you can avoid paying higher interest,” Shamir Kumar Nandy advises.

Missing a single payment can also affect your credit score, therefore, it is advised not to miss a single payment. One way to go about meeting up your credit card payment is to set up a plan. This can either be adding a due date to your calendar or set a reminder on your mobile calendar for your due date payment on credit card debt.

Spend responsibly

Avoid impulse or extravagant spending when your card limit is low. Learn to live within your means and try as much as possible to reduce your expenses. This can only be achieved by evaluating your earnings and making adjustments where they seem possible. To spend responsibly, Shamir Nandy suggests:

  1. Create a budget that can be followed and live by it
  2. Avoid impulse spending as much as possible
  3. Reduce your extravagances
  4. Always check your bills
  5. Be wise in the usage of credit card

Create savings for emergency funds

If there is anything, the covid 19 crisis has taught a lot of great lessons concerning finances. The fact that a booming economy can fall at any time which can lead to dependable workers finding themselves with no reliable income to fall back on. With determination and discipline, Shamir Kumar Nandy believes that a six months emergency fund can be built. With this, you won’t have to suffer panic with credit card debt, when you experience job loss or salary cut during this pandemic.

Avoid getting trapped by reward points and cashback

A lot of people get trapped when they see “don’t forget to earn cashback and reward points using your credit card.” You then find yourself swiping your credit card,  shopping for more in order to earn back your points. This marketing strategy can be tempting, and they are all bait to drain your fiance. Shop only when there is a need, not to earn points.

Consider using other credit options

A low-interest personal loan from banks or credit unions can be of great benefit to you. For this, having a single lower overall payment with good responsible spending is required. At the same time,  subjecting yourself to discipline can get you out of debt in no time.

Lower your interest rate by working with creditors

A good rapport with your credit card issuer can help reduce your interest rate. This comes with a condition that you pay at least the minimum on time with no breach of your credit limit. You can as well ask your card issuer to help reduce your interest rate.


These tips can prevent interest from getting accumulated and thus can save a lot of money. As great as credit cards can help make your financial purchase easy, it is advisable to make use of them responsibly.