As mentioned earlier, mutual money is greater than one type and cater to different investment objectives. They are available in several kinds, one of them is known as a ‘debt fund’. It is the antithesis associated with an equity fund. As their names suggest, debt funds put money into debt securities whereas equity funds put money into equity securities, such as equity finance or more commonly in stocks of public companies. These investments are, naturally, risky. On the other hand, it spend money on debt securities for example fixed deposits, government bonds, private deposits etc. They are low-risk and therefore are supposed to provide returns within the short-term within the form of an everyday income. The rubric of debt funds can also be separated into various types based on their nature. For example, liquid funds (also referred to as money market funds) put money into highly liquid money market instruments for very short durations, sometimes for as low as only one day.
GILT are debt funds that invest only in those financial securities which are endorsed, or sanctioned, from the government. They are practically risk free, until you aspect in fluctuating rates. Even then, GILT are an exceptionally stable means of investing your dollars. Other kinds of debt funds include MIPs, or monthly income plans, which purchase a proper mix of debt and equity securities to ensure the investor turns into a consistent monthly income. Yet more types of it, include floating rate funds, dynamic bond, ultra temporary, medium term income funds amongst others.
Each kind of debt fund caters to some other set of consumer demands. The best mutual funds to have an investor are the types which cover as much of his requirements and investment objectives as is possible. Even though they are generally a safe and secure means of investment, they still require investor to get cautious about where he puts his money. If you happen to become an excessively
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