The name itself indicates that dynamic bond funds are funds that dynamically invest in the management of equity portfolios. It invests more when the market is down and less when they are up. These funds have a combination of debt and equity in their portfolio. A dynamic bond fund aims to generate ‘optimal’ returns in both rising and falling market scenarios. To buy a dynamic bond fund online, check out the online website because it has the best mutual fund options, and is a well-known and reputable company.
Aditya Birla Sun Life Dynamic Bond Fund is an actively regulated portfolio of good credit quality bonds and money market instruments to provide investors with moderate returns and liquidity.
Aditya Birla Sun Life Dynamic bond funds give fund managers the flexibility to change bond time as well as portfolio compositions and give them more room in the changing interest rate scenario when needed.
Dynamic bond funds are debt mutual fund schemes that invest in a spectrum of debentures on investment grade, Certificate of Deposit, bonds, government securities, etc. Exposure to each of these instruments varies across schemes and is at the discretion of the fund manager. Like general debt funds, dynamic bond funds are not required to maintain a fixed ratio in any instrument.
Birla sun life dynamic bond fund’s features and benefits:
Risk factor: Dynamic bond funds are also vulnerable to certain risks. These funds are better than short-term funds as they are unable to use duration strategy.
Interest: Bond prices are inversely proportional to different interest rates. So if the interest rate rises, the bond price will go down and vice versa.
Macroeconomic Factors: Returns from dynamic bond funds can affect factors such as oil prices, fiscal deficit, and new government policies. To reduce short-term risks, the person must commit to more extended periods.
A dynamic bond fund is a mutual fund that represents a low-risk investment for that seeking short-term capital growth while keeping the bond running. Generally, these funds have large assets under management (AUM), which run-up to a portfolio of several thousand crores.
Taxation of Income: Capital gains
- When units of a mutual fund are sold after three years from the date of investment, the profit is taxed at the rate of 20 percent after the benefit of the inflation index.
- If the investor sells the mutual fund unit within three years of starting the investment, the total amount will be passed on to the profit-making investors and tax will be applicable as per the slab rate.
- As long as the units are in your hands, there will be no tax.
Dividends of mutual funds are taxed at 25% (actually 29.12% with surcharge and cess). Dividend Distribution Tax (DDT) is known for this purpose. While this tax is not directly payable by the investor, it is withheld before the investor pays dividend income.
Conclusion: Invest in Aditya Birla Sun Life Dynamic Bond Fund and achieve desirable returns with the taxation of earnings.
