Debt Funds

Debt funds are funds that invest in fixed income instruments, such as Money Market Instruments, Corporate Bonds, Government Bonds, etc. Debt funds are considered to be safer compared to equity investments. Debt funds are ideal for investors who prefer regular income, but do not like to take much risk. The risk on debt fund increases as the maturity of instrument increases, hence lower the maturity period lesser the risk on that debt investment. Quality of portfolio also matters a lot in debt fund as this reduced credit risk i.e. risk of default.

1. Ideal for those who are risk averse and need liquidity quickly
2. Debt funds are funds that invest predominantly in fixed income instruments
3. Debt funds are less volatile, therefore they are less risky than equity funds.
4. Some of the most invested debt funds are;
   1. Liquid Fund
   2. Low Duration Fund
   3. Banking and PSU Fund
   4. Corporate Bond Fund
   5. Dynamic Bond Fund