Source: Value Research Another reason why investors are showing interest in this relatively new category of funds is the pause in the interest rates by RBI. The returns from the category are also going up because of slow down in the rate cuts.
“The RBI has held the policy rates for three consecutive times. This precisely means that even though the stance is accommodative, the likelihood of frequent rate cuts is very low. In 2021, we don’t see rates being cut drastically. In such a situation when our policy rates are already low, the floaters funds tend to benefit and offer higher returns. That is why many big investors started to put money in them,” says Neeraj Chauhan, CEO, The Financial Mall.