DEBT SCHEMES
Indian Economy & Market|December 2021
Understanding Debt Mutual Funds

Currently the equity market seems to be quite volatile and frontline indices are already down by almost ten per cent from their recent high. For example, Nifty 50 is currently trading at 17,900 down from its recent high of 18,600. In such cases many investors move towards fixed income funds or debt mutual funds. Generally, we move towards debt investments to give our portfolio protection and towards equity investment to generate inflation beating long-term returns. However, it is important to understand that while equities are a riskier asset class, debt investments too have certain degrees of risk. Knowing and understanding some of the key risks in debt investments can help you better leverage the benefits of this asset class and choose the right debt fund for your portfolio. In the following paragraphs we will explain different types of debt schemes.

There are 16 sub-categories in debt schemes. So now we will walk through each of them.

Overnight Fund

Overnight fund are those that invest in overnight securities having maturity of 1 day.

Liquid Fund

Liquid fund invest in debt and money market securities with maturity of up to 91 days.

Ultra-Short Duration Fund

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