Different types of debt mutual funds and how to select the right one
A debt fund is a mutual fund scheme that invests in fixed income instruments
Investments in debt mutual funds are made in line with the investment mandate of the respective scheme
MUMBAI : The debt funds milieu is a bit more complex than equity funds and debt funds are impacted by a vast variety of macroeconomic and global factors, according to experts. A debt fund is a mutual fund scheme that invests in fixed income instruments, such as corporate debt securities, government and corporate bonds, and money market instruments that offer capital appreciation. Income funds or bond funds are also referred to as debt funds. According to the Securities Exchange Board of India (Sebi), there are 16 defined categories of debt funds. Mutual fund companies are allowed to float one scheme per category. The total expense ratio of debt funds ranges between 0.8% and 2%.