WHAT IS DEBT FUND?

WHAT IS DEBT FUND?

DEBT FUNDSIF YOU WANT TO AVOID THE MARKET FLUCTUATIONS OF EQUITY STOCKS AND ARE RISK-AVERSE, CONSIDER INVESTING IN DEBT-ORIENTED MUTUAL FUND SCHEMES.

A debt fund is a mutual fund scheme that invests in fixed income instruments, such as Corporate and Government Bonds, corporate debt securities, and money market instruments etc. that offer capital appreciation. Debt funds are also referred to as Income Funds or Bond Funds.

WHO SHOULD INVEST IN A DEBT FUND?
Debt funds are ideal for investors who want regular income, but are risk-averse. Debt funds are less volatile and, hence, are less risky than equity funds. If you have been saving in traditional fixed income products like Term Deposits, and looking for steady returns with low volatility, debt mutual funds could be a better option, as they help you achieve your financial goals in a more tax efficient manner and therefore earn better returns.

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