Unlock stable returns & less market stress. Learn the secrets to picking the right debt fund for your financial goals and build a resilient portfolio.
Your investment horizon dictates the fund type. Liquid funds for emergencies (3-12 months), short-duration for 1-3 years, and corporate bonds for 3-5 years. Don't treat all debt funds equally!
Yield-to-Maturity (YTM) shows expected return (higher = higher risk). Modified Duration reveals interest rate sensitivity – lower duration is ideal for short-term goals. Crucial metrics!
Check the credit rating of underlying bonds (AAA, AA+). High ratings mean lower default risk. Never chase high YTM by compromising on credit quality; safety is paramount for stable returns.
Debt fund gains held over 3 years benefit from 20% LTCG with indexation, significantly lowering tax vs. FDs. This boosts your post-tax returns, especially for higher tax brackets.
Don't chase past returns, ignore expense ratios, or exit loads. Debt funds aren't 'risk-free'. Focus on YTM, duration, credit quality, and always choose direct plans for better returns.
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