Debt mutual funds are also termed as fixed income securities. Mutual funds which are linked to debts are all about Investments in fixed income instruments. These instruments can be in the form of bonds which are issued directly by the government, bonds issued by the corporate market or debt securities. If you are someone who is new to the investment market and are willing to test your waters, then debt mutual funds is the right option for you.
Less risks good returns
Debt mutual funds fall amongst the secure Investment options. They are shielded from the volatile fluctuating market and therefore are subjected to lesser risks yet potential of yielding good returns.
Know your returns
As discussed earlier, debt mutual funds are also referred to as fixed income securities. The reason behind this is due to the awareness that it grants the investor with respect to the returns that can be expected on these funds. This allows the investor to decide and deliberate upon the choice of their investment scheme and plans regarding their returns, profits and future investments.
Fixed maturity period
Debt mutual funds come with a specific duration of maturity which is declared before investing money in the funds. It also follows a fixed rate of interest. This makes it a standard investment option and simplifies the procedure and understanding for the investor specially the newcomers in the investment market.
Debt mutual funds come with high liquidity. You can easily switch your investments from one scheme to another without bearing huge losses. It can also be cashed out conveniently in case of urgent monetary requirements. This also allows the Investor to constantly switch to profitable schemes depending on the market fluctuations.
Stabilise your portfolio
Debt mutual funds are more secure than most other forms of investments and therefore they provide more stability to the investor. This in turn stabilises the investor’s market portfolio and adds on to its credibility and productivity.
There are many different types of investments like SIPs, ELSS and equity mutual funds but they are all subjected to risks which are higher as compared to debt mutual funds. Investment is a game of experience, awareness and calculations. In order to master these attributes one needs to be an active part of the market. Investing in debt mutual funds can be the best icebreaker for your investment journey. You can begin with a small amount as your capital and learn to research, invest and switch your funds. This will also give you an idea about the technicalities of investment and while you are exploring the arena your capital will be safe and protected from major risks.