What Are Debt Funds & Who should Invest in them.
What are Debt Funds Debt funds are a type of mutual fund that primarily invests in fixed-income securities such as government bonds, corporate bonds, and other debt instruments. They are considered relatively safer investment options compared to equity funds because they offer a fixed rate of return. What are the various options for an investor in a debt fund? Based on an investor's risk appetite and time frame of investment an investor can choose from various categories of debt mutual funds that are available. Investors with a short time frame of one day to 3 months can use overnight or liquid funds investors with a time frame of 3 months to a year can use ultra-short-term funds. Investors with a time frame of one to 3 years can use short-term funds or medium-duration corporate bond funds. investors looking to capitalize on a fall in interest rates and on a capital appreciation can use long-tenure Gsec funds that have a maturity of upwards of 3 years those eyeing vis