Dynamic bond funds are debt schemes in which the fund manager has the flexibility to decide the duration of a portfolio. So, if a fund manager thinks interest rates are likely to rise, she can increase investments to shorter-tenure debt securities as these are less sensitive to change in interest rates. Similarly, she can increase longer-dated debt if she thinks interest rates are likely to fall because longer-tenure papers gain most when rates fall and vice-versa. Investors can look at such funds as rising inflation can force RBI to raise interest rates. These funds can cushion the impact of rising rates and benefit when rates start to fall. But check with your advisor which scheme is suitable for you.