There are several types of Mutual Funds that invest in various types of securities based on Purpose and Debt Mutual Funds are basically fixed income securities, such as Treasury Bills, Government Securities, Corporate Bonds, Money Market Instruments, based on various Time Horizons. Invest in other types of Debt Securities and usually all Debt Securities has a Fixed Maturity Date and Fixed Interest Rate.
For example, your Bank FD is a type of Debt Security because whenever you make a FD (Fixed Deposit) of your Savings, you receive a Fixed Interest and your FD has a Fixed Maturity Date.
The specialty of Debt Mutual Funds is that when you have to earn income as an interest, then you invest your savings in some type of Debt MF Scheme which is considered to be the safest after the bank FD. Because of Debt Mutual Fund Schemes? The money that is invested by the fund manager is invested in fixed debt schemes such as the FD, which does not directly relate to the ups and downs of the stock market, but from time to time, changes in bank interest rates The effect is in the form of Capital Appreciation or Capital Depreciation on your investment.
Debt Securities is also assigned to some type of Credit Rating by various rating agencies, on the basis of which an Investor can choose Better and Secure Debt Securities (Treasury Bills, Government Securities, Corporate Bonds, Money Market Instruments) . These ratings are some of the Independent Rating Organizations such as CARE, CRISIL, FITCH, Brickwork and ICRA Assign and these Agencies follow various types of Criteria to decide Ratings, so that various types of Debt Securities are marked on the basis of their quality. Can go
The best Debt Security is Represented with AAA and AA + Rating, and whenever you invest in any Debt Security as an Investor, you should invest only in Debt Securities with AAA or AA + Rating, and if you If you are investing through the Debt Mutual Fund Scheme, then you should invest only in those Debt MF Schemes whose portfolio is mostly rating AAA or AA + of Debt Securities.
Because normally you are investing in Debt MF only, while you want to keep your investment's original amount i.e. Capital in any situation. If you were in a position to take more risk on your capital, then Debt does not invest in MF Schemes but invest in Equity MF Schemes, which has a high probability of Growth. Do not lose your Capital Amount, that's why you invest in Debt Securities, so do not ever risk your capital more by investing in Debt Security with any other rating other than AAA and AA + Rating, If you can take more risk, then invest it for at least 5 years in a Diversified Equity MF Scheme, not in Debt MF Scheme.
At present time, there are a lot of fixed income or Debt Mutual Funds available on the basis of an Investor's Investment Horizon and Risk Taking Capacity, of which it can invest in any one or more schemes according to its convenience, and one of every MF Scheme There is a definite and appropriate purpose, which can be categorized as follows:
- Liquid Funds / Money Market Funds
- Ultra Short Term Funds
- Floating Rate Funds
- Short Term & Medium Term Income Funds
- Income Funds, Gilt Funds and Dynamic Funds
- Corporate Bond Funds
- Close Ended Debt Funds
- Fixed Maturity Plans (FMPs)
- Hybrid Funds
- Monthly Income Plans (MIPs)
- Capital Protection Oriented Funds
- Multiple Yield Funds
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