Choosing lower volatility with debt funds

Mutual funds have become a popular option for many investors. However, comprehensive due diligence must be undertaken before investing.

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While many investors associate mutual funds primarily with equity markets and growth potential, debt funds play an equally important role in building balanced portfolios.

Debt mutual funds invest in fixed-income instruments such as government securities, treasury bills, corporate bonds and money market instruments, etc. Generally, their aim is to provide relative liquidity while generating returns through interest income and movements in bond prices.

Debt funds can be considered by investors who prefer lower volatility compared to equity-oriented investments.