Long duration mutual fund

Mon, 18 May 2026 00:00:00 +0000

A long duration mutual fund is a SEBI-categorised debt mutual fund scheme that maintains a Macaulay duration greater than 7 years. The category was defined under the SEBI October 2017 categorisation framework as one of the 16 debt scheme sub-categories. Long duration funds are the most rate-sensitive debt category, with NAV moving substantially in response to interest-rate cycles.

For Indian retail investors, long duration funds offer:

Significant rate-cycle alpha potential: NAV appreciates strongly during rate-cut cycles.
Substantial NAV volatility: Can decline 5-10 per cent during rate-hike phases.
Long-term capital-appreciation opportunity: Beyond bond-coupon yield.
Tactical positioning instrument: Suits investors with clear rate-cycle views.

This article covers the SEBI category framework, the typical risk-return profile, the major schemes, the rate-cycle sensitivity, and the post-2023 tax treatment.

Long Duration on WebNotes

Long duration mutual fund