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Top 4 Debt Funds to Look For

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best debt funds

EXPLAINING DEBT FUNDS 

A debt fund invests in fixed rate of interest generating securities like treasury bills, commercial paper, corporate bonds, government securities, and other market instruments. The main reason behind investing in debt fund is to earn capital appreciation and interest income. Based on their credit ratings debt funds invest in different securities. The credit rating of security signifies whether the issuer will default in disbursing the returns they promised or not. The fund managers make sure that he is investing in high-credit instruments; like said, high-credit means that the entity is likely to pay interest regularly on the debt security also pay back the amount of principal upon maturity.  

TYPES OF DEBT FUNDS 

Here: 

  • Income FundsThese funds can invest in debt securities with different maturities and call on interest, for instance, income funds invest in securities having long maturities. This makes them stable as compared to any dynamic bond funds. The maturity of these funds is somewhere around 5-6 years average. 
  • Dynamic Bond FundsAs the name says, the fund manager keeps changing the portfolio according to the rate of interest.  
  • Liquid FundsThese funds invest in debt instruments with a maturity period of 91 days, precisely, making them risk-free. When compared to the savings account, liquid funds are better alternatives.  
  • Gilt FundsThese funds invest only in government securities which mean – High-rated securities with a low-credit risk; reason being, the government seldom defaults on the loan it takes as a form of debt instruments, thus, making gilt funds ideal for risk averse fixed-income investors.  
  • Fixed Maturity PlansThese are closed-ended debt funds that invest in fixed-income securities like government securities and corporate bonds. They come as a fixed horizon wherein your money will be locked-in; the horizon can be for months or years.  
  • Credit Opportunities FundsThese are new debt-funds, unlike other debt funds, these funds do not invest according to the maturities of debt instruments. Credit opportunities funds are less risky as compared to debt funds.  

TOP 4 DEBT FUNDS IN INDIA 

There are different qualitative and quantitative parameters to determine the mutual fund without exit load. Over here, let’s present you with top 4 debt funds as per Gulaq methodology you can invest in. Here: 

Debt Fund Name 
 
IDFC Bond Fund Medium Term Plan(G)- Direct Plan 
Axis Strategic Bond Fund(G) – Direct Plan 
Franklin India Income Opportunities Fund(G)- Direct Plan 
HDFC Medium Term Debt Plan(G)- Direct Plan 

*Investors may choose as per their goals & risk-appetite. Returns are subject to change.  

 

*Mutual fund investments are subject to market risks. Please read the scheme information and other related documents carefully before investing.

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