How to choose debt funds? | Value Research A simple way to select the right scheme is to focus on your investment horizon while picking a scheme for investment
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How to choose debt funds?

A simple way to select the right scheme is to focus on your investment horizon while picking a scheme for investment

Choosing a Debt fund is more complicated than choosing a diversified equity fund. Understanding and tracking interest rate movements (G Sec bonds) and credit risks (pvt sec) are difficult even for the seasoned investors. In this scenario, please suggest some good income fund, short term fund, ultra-short term funds to invest. Also, are government-backed AMCs like SBI, LIC, etc. are safer and more reliable than the private sector AMCs?
- Abhijit Deshpande

Choosing a debt scheme need not be a very complicated affair. A simple way to select the right scheme is to focus on your investment horizon and pick a matching scheme for investment. This will help eliminate a lot of confusion. For example, you should invest in a liquid scheme to park money for a few days or weeks; or pick an ultra-short term scheme to park money for a few months. A short-term fund can be used to park money for a year or two. A long-term debt scheme can be considered to park money for three to five years.

Yes, it is true that debt funds come with various risks such as interest rate risk, credit risk and liquidity risk. It is not possible to avoid these risks completely. However, you can limit their impact by sticking to a reputed fund house with a good record of managing debt investments.

Here is a list of our top-rated liquid schemes: Click Here

Here is a list of our top-rated ultra short-term schemes: Click Here

Here is a list of our top-rated short-term schemes: Click Here

Here is a list of our top-rated long-term income schemes: Click Here


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