Pros & Cons of Debt Funds

My current investment portfolio is tilted too much towards equities and equity mutual funds and the exposure to save havens like bank fixed deposit, NSC, PPF, etc is very limited. I want to balance my portfolio’s allocation between equity and debt. I have been told that debt funds are a better option as compared to a bank fixed deposits. I am open to investing in debt funds for a period of 2-5 years but I want to ensure that these investments do not erode my principal. Please guide.
-    Himanshu Mehta

This article was originally published on July 24, 2009.