Types of Debt Mutual Funds

There are several kinds of debt mutual funds that you can avail of, based on your financial goals. We list the most important ones.

Types of Debt Mutual Funds

A debt instrument is an option akin to a loan to the issuer. The debt fund is ideal for earning interest income and gaining capital appreciation steadily. Much like fixed deposits, the interest earning on the debt securities is pre-determined at the time of investing in the debt mutual fund. These are essentially fixed income instruments that offer diversification across types of securities.

Debt mutual funds are considered as some of the safest investment options since they offer predictable returns. They invest in a variety of instruments based on their credit rating. You can approach a leading fund house to find the different debt funds on offer, their investment horizon, credit rating, past performance, etc.

Conservative, risk-averse investors should invest in debt mutual fund schemes. The debt funds are less volatile, and you can stay invested for a longer time to tide over the possibility of falling rates and market volatility. Generally, debt mutual funds are ideal for short term and medium-term investment timeframes.

The types of debt mutual fund schemes in India

Leading fund houses in India offer a variety of debt mutual funds that are beneficial on several parameters. You can gain exposure to the debt markets through as many as 10 different debt fund schemes with leading fund houses. You also gain from experienced fund managers’ expertise in handling your portfolio.

Consider the types of debt funds you can invest in:

* Dynamic bond funds: These dynamic funds change their composition as per changing interest rates. Their average maturity period fluctuates when these bonds make interest rate decisions and invest in both short- and long-term securities.

* Short term and ultra-short funds

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