Look at these top performing debt-oriented conservative funds

With market volatility about to peak and uncertain economic environment facing the nation for a year at least, it makes sense to protect your capital rather than get exposed to risky assets with uncertain outcome.

One of the biggest pluses of the demonetisation is the softening interest rates and with interest rates expected to fall, debt instruments tend to do well.

Birla Sun Life MIP II-savings 5 plan , IDFC Monthly Income Plan and Reliance Monthly Income Plan are amongst the few debt schemes that have been consistent performers and have delivered returns above 12 per cent on an annualised basis over past three years. The returns however have droppes to below 12 per cent but above 11 per cent for all the three funds over a five year period.

One must note that the interest rates have been trending down for past five years. The real call is on interest rates if one must take exposure to debt funds.

With aggressive interest rate cuts expected from RBI, exposure to debt funds sounds like a smart tactical strategy.