Understanding the Cloze Test questions can sometimes be challenging. If you’ve ever wondered about the cloze test meaning in hindi or sought cloze test practice, you’re in the right place. A Cloze test, as many may know, is essentially a sentence completion test. But it’s not just about filling in the blanks of a sentence; it dives deeper into passages. In these Cloze Test questions, candidates are tasked with picking from several alternatives for each word that’s blanked out in a passage. Why is this done? Well, the main goal is to evaluate the candidate’s vocabulary prowess and assess their ability to grasp the entirety of the passage.
For aspirants, especially those preparing for competitive exams like the SSC CGL, knowing how to tackle cloze test questions is vital. Cloze test for SSC CGL and other similar examinations frequently feature these questions. In fact, anywhere from 4-8 questions can be expected from the cloze test topic in exams, including those for Bank, Insurance, and RRB. So, what does cloze test in english mean? And how is cloze test meaning different from cloze test meaning in hindi?
cloze test meaning in hindi :
लुप्त रिक्त स्थानों के साथ एक पैसेज होता है जहां उम्मीदवारों को पैसेज के स्वर के अनुसार उपयुक्त शब्दों के साथ रिक्त स्थान भरने की आवश्यकता होती है. अंग्रेजी में Cloze test को फिल-अप और रीडिंग कॉम्प्रिहेंशन का संयोजन कहा जा सकता है
If these questions have crossed your mind, don’t fret. This article will not only elucidate the cloze test meaning but also offer invaluable tips on mastering cloze test practice. With a sharp reading aptitude, one can easily score high marks in this section.
For all those eager to get a practical understanding, a sample passage is provided for a clearer grasp on Cloze Test questions. Whether you are gearing up for the cloze test for SSC CGL or simply wish to understand the cloze test in english, this comprehensive guide is here to assist. Dive in and unlock the secrets to mastering Cloze Test questions.
Directions:(1-10) In this you will get a blank below. You have to choose which of the following word in the blank is a misfit (i.e. does not fit in the blank with its meaning). Mark that as your answer.
1.Fixed income mutual fund investors have been a harried lot of late. The last one year has been a truly ……………………….(1) time. Liquid and short-term funds produced …………………….(2) returns, barely outpacing inflation. The …………………. (3) in the bond markets with yields shooting up by about 100 basis points resulted in returns in the range of 1-2 per cent for most of the long duration funds. Even that tiny gain was taxable. At the same time, the equity investor even in basic index funds earned about 28 per cent tax-free returns thanks to the …………………… (4) zero long-term capital gain regime and, of course, the overall market performance. Talk about neighbour’s envy! Enter the class of debt mutual funds — the dynamic bond schemes — which aim to provide “optimal” returns in market scenarios of both rising and falling interest rates, by “active” management of the portfolio. Such funds have sizable assets under management with each AMC having a portfolio of several thousand crores in this category. The last one year served as an acid test for such ……………………. (5) bond funds which go by various other names too like strategic, flexible income funds, etc. Benchmark 10-year bond yields, which went all the way down to 6.2 per cent post demonetisation, reversed course in the face of rising oil prices, …………………….. (6) of slippage in fiscal deficit and expected oversupply in bond markets owing to the announcement of the issuance of Rs 1.35 lakh crore bank recapitalisation bonds. Yields went through the roof and touched 7.5 per cent. So, how did dynamic bond funds fare in this scenario? An analysis of the returns of dynamic bond funds of some of the larger fund houses reveals a …………………… (7) picture. Returns have largely mirrored that of long duration funds, with yields in the range of 1-2 per cent, though a few funds have done better. But not a single dynamic bond fund’s return came anywhere near the liquid fund yield of about 6.5 per cent from its own fund house. The ……………………….(8) market conditions of the last one year should have provided the fund manager an ideal environment to prove his/ her …………………… (9) by “actively” managing the portfolio as declared in the scheme objectives, to provide reasonable returns to the investor. Not having lived up to investor expectations, fund managers need to introspect about the ……………………….. (10) of trying to time the markets. The “fund manager speak” in the scheme information documents apart, the dynamic bond fund manager in effect takes a call on the movement in market interest rates. These are closely linked to the rate of inflation. Oil prices have an outsized role on the inflation trajectory in a country like India which imports most of its needs. Perhaps a short-term stint at the oil trading desks in London, New York or Singapore of the leading players in this commodity would help fund managers forecast oil prices, hence inflation and interest rates! That’s only one part of the inflation story. Monsoon and weather conditions influence inflation in food prices. There are many other factors affecting inflation rates. In the face of such imponderables in predicting interest rate movements and the collapse in the portfolio returns in the recent past, fund houses need to introspect on the objectives of the dynamic bond schemes, the portfolio strategy, and if it makes sense, to continue this offering to their investors.
2.Fixed income mutual fund investors have been a harried lot of late. The last one year has been a truly ……………………….(1) time. Liquid and short-term funds produced …………………….(2) returns, barely outpacing inflation. The …………………. (3) in the bond markets with yields shooting up by about 100 basis points resulted in returns in the range of 1-2 per cent for most of the long duration funds. Even that tiny gain was taxable. At the same time, the equity investor even in basic index funds earned about 28 per cent tax-free returns thanks to the …………………… (4) zero long-term capital gain regime and, of course, the overall market performance. Talk about neighbour’s envy! Enter the class of debt mutual funds — the dynamic bond schemes — which aim to provide “optimal” returns in market scenarios of both rising and falling interest rates, by “active” management of the portfolio. Such funds have sizable assets under management with each AMC having a portfolio of several thousand crores in this category. The last one year served as an acid test for such ……………………. (5) bond funds which go by various other names too like strategic, flexible income funds, etc. Benchmark 10-year bond yields, which went all the way down to 6.2 per cent post demonetisation, reversed course in the face of rising oil prices, …………………….. (6) of slippage in fiscal deficit and expected oversupply in bond markets owing to the announcement of the issuance of Rs 1.35 lakh crore bank recapitalisation bonds. Yields went through the roof and touched 7.5 per cent. So, how did dynamic bond funds fare in this scenario? An analysis of the returns of dynamic bond funds of some of the larger fund houses reveals a …………………… (7) picture. Returns have largely mirrored that of long duration funds, with yields in the range of 1-2 per cent, though a few funds have done better. But not a single dynamic bond fund’s return came anywhere near the liquid fund yield of about 6.5 per cent from its own fund house. The ……………………….(8) market conditions of the last one year should have provided the fund manager an ideal environment to prove his/ her …………………… (9) by “actively” managing the portfolio as declared in the scheme objectives, to provide reasonable returns to the investor. Not having lived up to investor expectations, fund managers need to introspect about the ……………………….. (10) of trying to time the markets. The “fund manager speak” in the scheme information documents apart, the dynamic bond fund manager in effect takes a call on the movement in market interest rates. These are closely linked to the rate of inflation. Oil prices have an outsized role on the inflation trajectory in a country like India which imports most of its needs. Perhaps a short-term stint at the oil trading desks in London, New York or Singapore of the leading players in this commodity would help fund managers forecast oil prices, hence inflation and interest rates! That’s only one part of the inflation story. Monsoon and weather conditions influence inflation in food prices. There are many other factors affecting inflation rates. In the face of such imponderables in predicting interest rate movements and the collapse in the portfolio returns in the recent past, fund houses need to introspect on the objectives of the dynamic bond schemes, the portfolio strategy, and if it makes sense, to continue this offering to their investors.
3.Fixed income mutual fund investors have been a harried lot of late. The last one year has been a truly ……………………….(1) time. Liquid and short-term funds produced …………………….(2) returns, barely outpacing inflation. The …………………. (3) in the bond markets with yields shooting up by about 100 basis points resulted in returns in the range of 1-2 per cent for most of the long duration funds. Even that tiny gain was taxable. At the same time, the equity investor even in basic index funds earned about 28 per cent tax-free returns thanks to the …………………… (4) zero long-term capital gain regime and, of course, the overall market performance. Talk about neighbour’s envy! Enter the class of debt mutual funds — the dynamic bond schemes — which aim to provide “optimal” returns in market scenarios of both rising and falling interest rates, by “active” management of the portfolio. Such funds have sizable assets under management with each AMC having a portfolio of several thousand crores in this category. The last one year served as an acid test for such ……………………. (5) bond funds which go by various other names too like strategic, flexible income funds, etc. Benchmark 10-year bond yields, which went all the way down to 6.2 per cent post demonetisation, reversed course in the face of rising oil prices, …………………….. (6) of slippage in fiscal deficit and expected oversupply in bond markets owing to the announcement of the issuance of Rs 1.35 lakh crore bank recapitalisation bonds. Yields went through the roof and touched 7.5 per cent. So, how did dynamic bond funds fare in this scenario? An analysis of the returns of dynamic bond funds of some of the larger fund houses reveals a …………………… (7) picture. Returns have largely mirrored that of long duration funds, with yields in the range of 1-2 per cent, though a few funds have done better. But not a single dynamic bond fund’s return came anywhere near the liquid fund yield of about 6.5 per cent from its own fund house. The ……………………….(8) market conditions of the last one year should have provided the fund manager an ideal environment to prove his/ her …………………… (9) by “actively” managing the portfolio as declared in the scheme objectives, to provide reasonable returns to the investor. Not having lived up to investor expectations, fund managers need to introspect about the ……………………….. (10) of trying to time the markets. The “fund manager speak” in the scheme information documents apart, the dynamic bond fund manager in effect takes a call on the movement in market interest rates. These are closely linked to the rate of inflation. Oil prices have an outsized role on the inflation trajectory in a country like India which imports most of its needs. Perhaps a short-term stint at the oil trading desks in London, New York or Singapore of the leading players in this commodity would help fund managers forecast oil prices, hence inflation and interest rates! That’s only one part of the inflation story. Monsoon and weather conditions influence inflation in food prices. There are many other factors affecting inflation rates. In the face of such imponderables in predicting interest rate movements and the collapse in the portfolio returns in the recent past, fund houses need to introspect on the objectives of the dynamic bond schemes, the portfolio strategy, and if it makes sense, to continue this offering to their investors.
4.Fixed income mutual fund investors have been a harried lot of late. The last one year has been a truly ……………………….(1) time. Liquid and short-term funds produced …………………….(2) returns, barely outpacing inflation. The …………………. (3) in the bond markets with yields shooting up by about 100 basis points resulted in returns in the range of 1-2 per cent for most of the long duration funds. Even that tiny gain was taxable. At the same time, the equity investor even in basic index funds earned about 28 per cent tax-free returns thanks to the …………………… (4) zero long-term capital gain regime and, of course, the overall market performance. Talk about neighbour’s envy! Enter the class of debt mutual funds — the dynamic bond schemes — which aim to provide “optimal” returns in market scenarios of both rising and falling interest rates, by “active” management of the portfolio. Such funds have sizable assets under management with each AMC having a portfolio of several thousand crores in this category. The last one year served as an acid test for such ……………………. (5) bond funds which go by various other names too like strategic, flexible income funds, etc. Benchmark 10-year bond yields, which went all the way down to 6.2 per cent post demonetisation, reversed course in the face of rising oil prices, …………………….. (6) of slippage in fiscal deficit and expected oversupply in bond markets owing to the announcement of the issuance of Rs 1.35 lakh crore bank recapitalisation bonds. Yields went through the roof and touched 7.5 per cent. So, how did dynamic bond funds fare in this scenario? An analysis of the returns of dynamic bond funds of some of the larger fund houses reveals a …………………… (7) picture. Returns have largely mirrored that of long duration funds, with yields in the range of 1-2 per cent, though a few funds have done better. But not a single dynamic bond fund’s return came anywhere near the liquid fund yield of about 6.5 per cent from its own fund house. The ……………………….(8) market conditions of the last one year should have provided the fund manager an ideal environment to prove his/ her …………………… (9) by “actively” managing the portfolio as declared in the scheme objectives, to provide reasonable returns to the investor. Not having lived up to investor expectations, fund managers need to introspect about the ……………………….. (10) of trying to time the markets. The “fund manager speak” in the scheme information documents apart, the dynamic bond fund manager in effect takes a call on the movement in market interest rates. These are closely linked to the rate of inflation. Oil prices have an outsized role on the inflation trajectory in a country like India which imports most of its needs. Perhaps a short-term stint at the oil trading desks in London, New York or Singapore of the leading players in this commodity would help fund managers forecast oil prices, hence inflation and interest rates! That’s only one part of the inflation story. Monsoon and weather conditions influence inflation in food prices. There are many other factors affecting inflation rates. In the face of such imponderables in predicting interest rate movements and the collapse in the portfolio returns in the recent past, fund houses need to introspect on the objectives of the dynamic bond schemes, the portfolio strategy, and if it makes sense, to continue this offering to their investors.
5.Fixed income mutual fund investors have been a harried lot of late. The last one year has been a truly ……………………….(1) time. Liquid and short-term funds produced …………………….(2) returns, barely outpacing inflation. The …………………. (3) in the bond markets with yields shooting up by about 100 basis points resulted in returns in the range of 1-2 per cent for most of the long duration funds. Even that tiny gain was taxable. At the same time, the equity investor even in basic index funds earned about 28 per cent tax-free returns thanks to the …………………… (4) zero long-term capital gain regime and, of course, the overall market performance. Talk about neighbour’s envy! Enter the class of debt mutual funds — the dynamic bond schemes — which aim to provide “optimal” returns in market scenarios of both rising and falling interest rates, by “active” management of the portfolio. Such funds have sizable assets under management with each AMC having a portfolio of several thousand crores in this category. The last one year served as an acid test for such ……………………. (5) bond funds which go by various other names too like strategic, flexible income funds, etc. Benchmark 10-year bond yields, which went all the way down to 6.2 per cent post demonetisation, reversed course in the face of rising oil prices, …………………….. (6) of slippage in fiscal deficit and expected oversupply in bond markets owing to the announcement of the issuance of Rs 1.35 lakh crore bank recapitalisation bonds. Yields went through the roof and touched 7.5 per cent. So, how did dynamic bond funds fare in this scenario? An analysis of the returns of dynamic bond funds of some of the larger fund houses reveals a …………………… (7) picture. Returns have largely mirrored that of long duration funds, with yields in the range of 1-2 per cent, though a few funds have done better. But not a single dynamic bond fund’s return came anywhere near the liquid fund yield of about 6.5 per cent from its own fund house. The ……………………….(8) market conditions of the last one year should have provided the fund manager an ideal environment to prove his/ her …………………… (9) by “actively” managing the portfolio as declared in the scheme objectives, to provide reasonable returns to the investor. Not having lived up to investor expectations, fund managers need to introspect about the ……………………….. (10) of trying to time the markets. The “fund manager speak” in the scheme information documents apart, the dynamic bond fund manager in effect takes a call on the movement in market interest rates. These are closely linked to the rate of inflation. Oil prices have an outsized role on the inflation trajectory in a country like India which imports most of its needs. Perhaps a short-term stint at the oil trading desks in London, New York or Singapore of the leading players in this commodity would help fund managers forecast oil prices, hence inflation and interest rates! That’s only one part of the inflation story. Monsoon and weather conditions influence inflation in food prices. There are many other factors affecting inflation rates. In the face of such imponderables in predicting interest rate movements and the collapse in the portfolio returns in the recent past, fund houses need to introspect on the objectives of the dynamic bond schemes, the portfolio strategy, and if it makes sense, to continue this offering to their investors.
6.Fixed income mutual fund investors have been a harried lot of late. The last one year has been a truly ……………………….(1) time. Liquid and short-term funds produced …………………….(2) returns, barely outpacing inflation. The …………………. (3) in the bond markets with yields shooting up by about 100 basis points resulted in returns in the range of 1-2 per cent for most of the long duration funds. Even that tiny gain was taxable. At the same time, the equity investor even in basic index funds earned about 28 per cent tax-free returns thanks to the …………………… (4) zero long-term capital gain regime and, of course, the overall market performance. Talk about neighbour’s envy! Enter the class of debt mutual funds — the dynamic bond schemes — which aim to provide “optimal” returns in market scenarios of both rising and falling interest rates, by “active” management of the portfolio. Such funds have sizable assets under management with each AMC having a portfolio of several thousand crores in this category. The last one year served as an acid test for such ……………………. (5) bond funds which go by various other names too like strategic, flexible income funds, etc. Benchmark 10-year bond yields, which went all the way down to 6.2 per cent post demonetisation, reversed course in the face of rising oil prices, …………………….. (6) of slippage in fiscal deficit and expected oversupply in bond markets owing to the announcement of the issuance of Rs 1.35 lakh crore bank recapitalisation bonds. Yields went through the roof and touched 7.5 per cent. So, how did dynamic bond funds fare in this scenario? An analysis of the returns of dynamic bond funds of some of the larger fund houses reveals a …………………… (7) picture. Returns have largely mirrored that of long duration funds, with yields in the range of 1-2 per cent, though a few funds have done better. But not a single dynamic bond fund’s return came anywhere near the liquid fund yield of about 6.5 per cent from its own fund house. The ……………………….(8) market conditions of the last one year should have provided the fund manager an ideal environment to prove his/ her …………………… (9) by “actively” managing the portfolio as declared in the scheme objectives, to provide reasonable returns to the investor. Not having lived up to investor expectations, fund managers need to introspect about the ……………………….. (10) of trying to time the markets. The “fund manager speak” in the scheme information documents apart, the dynamic bond fund manager in effect takes a call on the movement in market interest rates. These are closely linked to the rate of inflation. Oil prices have an outsized role on the inflation trajectory in a country like India which imports most of its needs. Perhaps a short-term stint at the oil trading desks in London, New York or Singapore of the leading players in this commodity would help fund managers forecast oil prices, hence inflation and interest rates! That’s only one part of the inflation story. Monsoon and weather conditions influence inflation in food prices. There are many other factors affecting inflation rates. In the face of such imponderables in predicting interest rate movements and the collapse in the portfolio returns in the recent past, fund houses need to introspect on the objectives of the dynamic bond schemes, the portfolio strategy, and if it makes sense, to continue this offering to their investors.
7.Fixed income mutual fund investors have been a harried lot of late. The last one year has been a truly ……………………….(1) time. Liquid and short-term funds produced …………………….(2) returns, barely outpacing inflation. The …………………. (3) in the bond markets with yields shooting up by about 100 basis points resulted in returns in the range of 1-2 per cent for most of the long duration funds. Even that tiny gain was taxable. At the same time, the equity investor even in basic index funds earned about 28 per cent tax-free returns thanks to the …………………… (4) zero long-term capital gain regime and, of course, the overall market performance. Talk about neighbour’s envy! Enter the class of debt mutual funds — the dynamic bond schemes — which aim to provide “optimal” returns in market scenarios of both rising and falling interest rates, by “active” management of the portfolio. Such funds have sizable assets under management with each AMC having a portfolio of several thousand crores in this category. The last one year served as an acid test for such ……………………. (5) bond funds which go by various other names too like strategic, flexible income funds, etc. Benchmark 10-year bond yields, which went all the way down to 6.2 per cent post demonetisation, reversed course in the face of rising oil prices, …………………….. (6) of slippage in fiscal deficit and expected oversupply in bond markets owing to the announcement of the issuance of Rs 1.35 lakh crore bank recapitalisation bonds. Yields went through the roof and touched 7.5 per cent. So, how did dynamic bond funds fare in this scenario? An analysis of the returns of dynamic bond funds of some of the larger fund houses reveals a …………………… (7) picture. Returns have largely mirrored that of long duration funds, with yields in the range of 1-2 per cent, though a few funds have done better. But not a single dynamic bond fund’s return came anywhere near the liquid fund yield of about 6.5 per cent from its own fund house. The ……………………….(8) market conditions of the last one year should have provided the fund manager an ideal environment to prove his/ her …………………… (9) by “actively” managing the portfolio as declared in the scheme objectives, to provide reasonable returns to the investor. Not having lived up to investor expectations, fund managers need to introspect about the ……………………….. (10) of trying to time the markets. The “fund manager speak” in the scheme information documents apart, the dynamic bond fund manager in effect takes a call on the movement in market interest rates. These are closely linked to the rate of inflation. Oil prices have an outsized role on the inflation trajectory in a country like India which imports most of its needs. Perhaps a short-term stint at the oil trading desks in London, New York or Singapore of the leading players in this commodity would help fund managers forecast oil prices, hence inflation and interest rates! That’s only one part of the inflation story. Monsoon and weather conditions influence inflation in food prices. There are many other factors affecting inflation rates. In the face of such imponderables in predicting interest rate movements and the collapse in the portfolio returns in the recent past, fund houses need to introspect on the objectives of the dynamic bond schemes, the portfolio strategy, and if it makes sense, to continue this offering to their investors.
8.Fixed income mutual fund investors have been a harried lot of late. The last one year has been a truly ……………………….(1) time. Liquid and short-term funds produced …………………….(2) returns, barely outpacing inflation. The …………………. (3) in the bond markets with yields shooting up by about 100 basis points resulted in returns in the range of 1-2 per cent for most of the long duration funds. Even that tiny gain was taxable. At the same time, the equity investor even in basic index funds earned about 28 per cent tax-free returns thanks to the …………………… (4) zero long-term capital gain regime and, of course, the overall market performance. Talk about neighbour’s envy! Enter the class of debt mutual funds — the dynamic bond schemes — which aim to provide “optimal” returns in market scenarios of both rising and falling interest rates, by “active” management of the portfolio. Such funds have sizable assets under management with each AMC having a portfolio of several thousand crores in this category. The last one year served as an acid test for such ……………………. (5) bond funds which go by various other names too like strategic, flexible income funds, etc. Benchmark 10-year bond yields, which went all the way down to 6.2 per cent post demonetisation, reversed course in the face of rising oil prices, …………………….. (6) of slippage in fiscal deficit and expected oversupply in bond markets owing to the announcement of the issuance of Rs 1.35 lakh crore bank recapitalisation bonds. Yields went through the roof and touched 7.5 per cent. So, how did dynamic bond funds fare in this scenario? An analysis of the returns of dynamic bond funds of some of the larger fund houses reveals a …………………… (7) picture. Returns have largely mirrored that of long duration funds, with yields in the range of 1-2 per cent, though a few funds have done better. But not a single dynamic bond fund’s return came anywhere near the liquid fund yield of about 6.5 per cent from its own fund house. The ……………………….(8) market conditions of the last one year should have provided the fund manager an ideal environment to prove his/ her …………………… (9) by “actively” managing the portfolio as declared in the scheme objectives, to provide reasonable returns to the investor. Not having lived up to investor expectations, fund managers need to introspect about the ……………………….. (10) of trying to time the markets. The “fund manager speak” in the scheme information documents apart, the dynamic bond fund manager in effect takes a call on the movement in market interest rates. These are closely linked to the rate of inflation. Oil prices have an outsized role on the inflation trajectory in a country like India which imports most of its needs. Perhaps a short-term stint at the oil trading desks in London, New York or Singapore of the leading players in this commodity would help fund managers forecast oil prices, hence inflation and interest rates! That’s only one part of the inflation story. Monsoon and weather conditions influence inflation in food prices. There are many other factors affecting inflation rates. In the face of such imponderables in predicting interest rate movements and the collapse in the portfolio returns in the recent past, fund houses need to introspect on the objectives of the dynamic bond schemes, the portfolio strategy, and if it makes sense, to continue this offering to their investors.
9.Fixed income mutual fund investors have been a harried lot of late. The last one year has been a truly ……………………….(1) time. Liquid and short-term funds produced …………………….(2) returns, barely outpacing inflation. The …………………. (3) in the bond markets with yields shooting up by about 100 basis points resulted in returns in the range of 1-2 per cent for most of the long duration funds. Even that tiny gain was taxable. At the same time, the equity investor even in basic index funds earned about 28 per cent tax-free returns thanks to the …………………… (4) zero long-term capital gain regime and, of course, the overall market performance. Talk about neighbour’s envy! Enter the class of debt mutual funds — the dynamic bond schemes — which aim to provide “optimal” returns in market scenarios of both rising and falling interest rates, by “active” management of the portfolio. Such funds have sizable assets under management with each AMC having a portfolio of several thousand crores in this category. The last one year served as an acid test for such ……………………. (5) bond funds which go by various other names too like strategic, flexible income funds, etc. Benchmark 10-year bond yields, which went all the way down to 6.2 per cent post demonetisation, reversed course in the face of rising oil prices, …………………….. (6) of slippage in fiscal deficit and expected oversupply in bond markets owing to the announcement of the issuance of Rs 1.35 lakh crore bank recapitalisation bonds. Yields went through the roof and touched 7.5 per cent. So, how did dynamic bond funds fare in this scenario? An analysis of the returns of dynamic bond funds of some of the larger fund houses reveals a …………………… (7) picture. Returns have largely mirrored that of long duration funds, with yields in the range of 1-2 per cent, though a few funds have done better. But not a single dynamic bond fund’s return came anywhere near the liquid fund yield of about 6.5 per cent from its own fund house. The ……………………….(8) market conditions of the last one year should have provided the fund manager an ideal environment to prove his/ her …………………… (9) by “actively” managing the portfolio as declared in the scheme objectives, to provide reasonable returns to the investor. Not having lived up to investor expectations, fund managers need to introspect about the ……………………….. (10) of trying to time the markets. The “fund manager speak” in the scheme information documents apart, the dynamic bond fund manager in effect takes a call on the movement in market interest rates. These are closely linked to the rate of inflation. Oil prices have an outsized role on the inflation trajectory in a country like India which imports most of its needs. Perhaps a short-term stint at the oil trading desks in London, New York or Singapore of the leading players in this commodity would help fund managers forecast oil prices, hence inflation and interest rates! That’s only one part of the inflation story. Monsoon and weather conditions influence inflation in food prices. There are many other factors affecting inflation rates. In the face of such imponderables in predicting interest rate movements and the collapse in the portfolio returns in the recent past, fund houses need to introspect on the objectives of the dynamic bond schemes, the portfolio strategy, and if it makes sense, to continue this offering to their investors.
10.Fixed income mutual fund investors have been a harried lot of late. The last one year has been a truly ……………………….(1) time. Liquid and short-term funds produced …………………….(2) returns, barely outpacing inflation. The …………………. (3) in the bond markets with yields shooting up by about 100 basis points resulted in returns in the range of 1-2 per cent for most of the long duration funds. Even that tiny gain was taxable. At the same time, the equity investor even in basic index funds earned about 28 per cent tax-free returns thanks to the …………………… (4) zero long-term capital gain regime and, of course, the overall market performance. Talk about neighbour’s envy! Enter the class of debt mutual funds — the dynamic bond schemes — which aim to provide “optimal” returns in market scenarios of both rising and falling interest rates, by “active” management of the portfolio. Such funds have sizable assets under management with each AMC having a portfolio of several thousand crores in this category. The last one year served as an acid test for such ……………………. (5) bond funds which go by various other names too like strategic, flexible income funds, etc. Benchmark 10-year bond yields, which went all the way down to 6.2 per cent post demonetisation, reversed course in the face of rising oil prices, …………………….. (6) of slippage in fiscal deficit and expected oversupply in bond markets owing to the announcement of the issuance of Rs 1.35 lakh crore bank recapitalisation bonds. Yields went through the roof and touched 7.5 per cent. So, how did dynamic bond funds fare in this scenario? An analysis of the returns of dynamic bond funds of some of the larger fund houses reveals a …………………… (7) picture. Returns have largely mirrored that of long duration funds, with yields in the range of 1-2 per cent, though a few funds have done better. But not a single dynamic bond fund’s return came anywhere near the liquid fund yield of about 6.5 per cent from its own fund house. The ……………………….(8) market conditions of the last one year should have provided the fund manager an ideal environment to prove his/ her …………………… (9) by “actively” managing the portfolio as declared in the scheme objectives, to provide reasonable returns to the investor. Not having lived up to investor expectations, fund managers need to introspect about the ……………………….. (10) of trying to time the markets. The “fund manager speak” in the scheme information documents apart, the dynamic bond fund manager in effect takes a call on the movement in market interest rates. These are closely linked to the rate of inflation. Oil prices have an outsized role on the inflation trajectory in a country like India which imports most of its needs. Perhaps a short-term stint at the oil trading desks in London, New York or Singapore of the leading players in this commodity would help fund managers forecast oil prices, hence inflation and interest rates! That’s only one part of the inflation story. Monsoon and weather conditions influence inflation in food prices. There are many other factors affecting inflation rates. In the face of such imponderables in predicting interest rate movements and the collapse in the portfolio returns in the recent past, fund houses need to introspect on the objectives of the dynamic bond schemes, the portfolio strategy, and if it makes sense, to continue this offering to their investors.