KNOWLEDGE CENTRE

More on Debt Funds

    Debt Funds comprise of Liquid Fund, Ultra Low Duration Funds, Ultra Short Duration Funds, Money Market Funds,Corporate Funds, Banking Funds & PSU Funds, Gilt Funds etc.

    They invest in government securities and bonds of corporates and financial institutions and are also known as
    Income Funds.

    Debt funds generate returns for investors through the interest they earn by lending money to the government,
    corporates and financial institutions through various bonds.


    Features of Debt Funds
  • Mutual funds invest in bonds that are tradable
  • Prices of bonds can rise of fall depending on the interest rate fluctuations, similar to the stock markets.
  • A mutual fund can make additional profit by selling bonds at a price higher than purchase price.
    But the reverse could also happen if prices fall.
  • By and large, debt securities are not as volatile as equities and hence debt funds are relatively
    safer investments especially for the conservative investor.
Mutual Fund investments are subject to market risks, please read all scheme related documents carefully.