Question: Which Debt Fund Is Best?

Is there any risk in debt funds?

Investing in debt funds carries various types of risk.

These risks include Credit risk, Interest rate risk, Inflation risk, reinvestment risk etc.

But the key risks which needs be considered before investing in Debt funds are Credit Risk and Interest Rate Risk; Credit Risk (Default Risk):.

Is liquid funds safe now?

Liquid funds or any other fund which is meant for short term goals ideally should avoid taking excessive credit or liquidity risk. The latest debacle shows that some debt funds have not fulfilled this basic requirement and took undue credit risk. Liquid funds carry no credit risk, no liquidity risk.

Do debt funds have lock in period?

Except for fixed maturity plans (FMPs), debt mutual funds normally do not have any lock-in period. However, early exits could result in a higher tax out go. Investments in debt mutual funds held for more than three years qualify for long-term capital gains of 20 per cent with indexation benefit.

Which debt fund gives highest return?

Top 10 Debt Mutual FundsFund NameCategory1Y ReturnsKotak Bond Short Term PlanDebt10.7%ICICI Prudential Ultra Short Term FundDebt8.0%Nippon India Gilt Securities FundDebt12.0%PGIM India Ultra Short Term FundDebt53.3%12 more rows

How much should I invest in debt fund?

The minimum investment in such instruments should be 80 percent of total assets. Fixed-maturity plans: Fixed-maturity plans are closed-ended debt funds that generate income through investment in debt and money market instruments as well as government securities maturing on or before the maturity date of the plan.

How safe are liquid funds?

Liquid funds are high liquidity open-ended income schemes that invest in debt and money market instruments such as government securities, treasury bills and call money among others. These instruments have a maximum maturity period of 91 days and are considered safe because they mitigate interest rate volatility risk.

Which fund is best to invest in 2020?

Scheme namePercentage (%)SBI Magnum Multicap – G50ICICI Prudential Bluechip Fund – G50Motilal Oswal Multicap 35 Fund – G30Axis Bluechip Fund- G209 more rows•Aug 19, 2020

What is Blue Chip Fund?

A Blue chip fund is a term used to indicate well-established and financially sound companies. Blue chip funds invest in stocks of those companies that have a credible track record with sound financials along with regular dividend payments and profitability over the years.

What are the top 5 mutual funds?

Large-Company Stock Funds – 5 yearsFUND NAMESYMBOL5-YR RETURNMorgan Stanley Multi Cap Growth ACPOAX26.67%Morgan Stanley Instl Growth Portfolio AMSEGX23.68RidgeWorth Aggressive Growth Stock ASAGAX23.49Transamerica Capital Growth AIALAX23.16 more rows

Which mutual fund is risk free?

Top 10 Low Risk Mutual FundsFund NameCategoryRiskICICI Prudential Liquid FundDebtLowNippon India Liquid FundDebtLowLIC MF Liquid FundDebtLowPGIM India Insta Cash FundDebtLow7 more rows

Which is better liquid fund or debt fund?

The liquid fund is a subset of debt fund scheme that invests its fund in fixed securities having a very short maturity tenure….Taxation.ParametersLiquid FundsDebt FundsTaxationSame as Debt FundsShort-term: Taxed as per individual’s slab rates Long-term: Taxed at 20% and had taxation benefits4 more rows•7 days ago

Can I lose money in liquid funds?

Since a liquid fund invests only in short term securities, it’s market value does not respond much when interest rates change in the market. This means that liquid funds do not have significant capital gains or losses.

Can you lose all your money in a mutual fund?

All funds carry some level of risk. With mutual funds, you may lose some or all of the money you invest because the securities held by a fund can go down in value. Dividends or interest payments may also change as market conditions change.

Which SIP is best for 5 years?

Best SIP plans for 5 year investmentFund Name3-Year SIP Returns (%)5-Year SIP Returns (%)L&T Midcap Fund (Regular)1.65%7.86%Mirae Asset Large Cap Fund (Regular)10.46%12.47%DSP Mid Cap Fund (Regular)6.52%9.91%Invesco India Mid Cap Fund (Regular)6.11%8.67%8 more rows•Jan 23, 2020

Can debt funds give negative returns?

Rule: Investments in debt funds are safe because they do not have exposure to volatile assets such as equity shares. Exception: When interest rates are rising, long-term debt funds can give negative returns. … The funds holding bonds of long maturities suffered losses, with the average fund losing 7.26 per cent.

Is it a good time to invest in debt funds?

The simple thumb rule for investing in debt is: when the interest rates are around or below 6%, it is better to invest in debt funds like liquid funds or ultra-short duration funds or low duration funds. Or it could be even short-term fixed deposits with banks.

Are debt funds risk free?

Things to keep in mind when investing in a debt fund now You should keep a tab on risks like credit risk, liquidity risk, interest rate risk, and duration risk when investing in a debt fund. … One thing is now clear to most investors — debt funds are not risk-free.