Overnight funds, the mutual fund schemes which invest money in bonds and treasury instruments maturing in one day, have topped the performance charts among open-ended debt funds with 1.04 percent returns, according to Value Research.

The RBI has raised the repo rate by 90 basis points and market participants expect further rate hikes. This has pushed up the yields across tenures. No wonder, the marked-to-market losses for most debt funds have suppressed the returns. Since overnight funds invest only for a day, there is little interest-rate risk. These schemes appear to be best placed in a rising interest rate scenario, as short-term parking place for money.