Debt Funds Advisor in Mumbai, India.
A debt fund is an investment pool, like a mutual fund or exchange-traded fund, in which core holdings are fixed-income investments. We advise our clients in investing in debt fund short-term or long-term bonds, securitized products, money market instruments or floating rate debt. As the fee ratios on debt funds are usually lower, on average than equity funds because the overall management costs are lower.
BREAKING DOWN ‘Debt Fund’
A debt fund is also known as a credit fund or a fixed income fund.
Debt funds fall under fixed income asset category and are typically used as tactical investments for low-risk portions of a portfolio that may be seeking preservation of capital or for investors seeking low-risk income distributions.
Debt Fund Risk
Within fixed income category debt funds can invest in a wide range of securities that have varying risk levels. A form of the Government of India debt is usually considered to have least risk. Corporate businesses issue debt as part of their capital structure. Corporate debt is generally classified by a company’s credit rating. Investment grade debt will be issued from companies with generally stable outlooks and higher credit quality.
High yield debt is usually issued from the lower credit quality companies with the potential of emerging growth prospects. High yield debt can generate higher returns with the higher risk. Other debt categories include developed market debt and emerging market debt.
Debt Fund Investing
There is a wide range of debt fund options for investors seeking low-risk income investments within the fixed income universe. Infinitum Wealth advisors best plan to gain maximum benefit, investors can generally turn to passive and active investment products.