Mutual Fund Application Forms Download Any Applications
Invest in Tax Saving Mutual Funds Invest Online
Infrastructure Bond Application Forms Download Applications

Tuesday, January 28, 2014

Are Debt Mutual Funds safe Investments?

Download Tax Saving Mutual Fund Application Forms

Invest In Tax Saving Mutual Funds Online

Buy Gold Mutual Funds

Leave a missed Call on

94 8300 8300

 

No mutual fund guarantees perfect safety, but carefully choosing a debt fund can give you very little to worry about…

 

Investors know very well that theoretically, there is no such thing as a guarantee of perfect safety in any kind of mutual fund. Indeed, such a thing is not permissible in the rules under which mutual funds operate in India. However, the practical answer is that if you take care and choose a debt fund carefully, then there is very little reason to be worried about the safety of your money. And in the remote event that you do make some losses, they are likely to be small and temporary.

 

A debt fund invests in bonds and one would expect that as long as the bond issuer pays the interest and redeems the bonds when they are due, there should be no losses. Since practically all bond investments by Indian funds is in highly-rated instruments and defaults are rare.

 

However, bonds are tradable instruments that are bought and sold in a bond market just like stocks are in the stock market. Obviously, in this market, the prices of bonds can go up or down. When the price of a bond goes down, then the NAVs of debt funds holding those bonds will fall. If investors in that fund sell at that point, then they will could face losses.

 

Bond prices generally rise or fall in response to interest rate changes, or like any market, the expectation of interest rate changes. The simple way to avoid losses in bond funds is to match your period of investments with what is called the 'maturity' of the bond fund. The maturity refers to the period after which the bonds held by a bond fund will mature.

 

If you are investing for a short period like a few days, then go for liquid. For longer periods of investments, the suitable fund categories are progressively ultra short-term funds, short-term funds and then the medium and longer term categories. If the period of investments is fixed and you don't think you need the have the money on call, then Fixed Maturity Funds (FMPs) are best. This kind of a systematic approach, along with good fund selection, will ensure that the chance of making a loss in debt fund investments is minimised.

 

Things to know

-Bond prices generally rise or fall in response to interest rate changes, or like any market, the expectation of interest rate changes

-The best way to avoid losses in bond funds is to match your period of investments with what is called the 'maturity' of the bond fund.

 

For further information contact Prajna Capital on 94 8300 8300 by leaving a missed call

 

 

Leave a missed Call on 94 8300 8300

 

Leave your comment with mail ID and we will answer them

OR

You can write back to us at

PrajnaCapital [at] Gmail [dot] Com

 

---------------------------------------------

Invest Mutual Funds Online

Invest Any Mutual Fund Online

 

Download Mutual Fund Application Forms from all AMCs

Download Mutual Any Fund Application Forms

---------------------------------------------

 

Best Performing Mutual Funds

    1. Largecap Funds             Invest Online
      1. DSP BlackRock Top 100 Fund
      2. ICICI Prudential Focused Blue Chip Fund
      3. Franklin India Bluechip
      4. ICICI Prudential Top 100 Fund

B. Large and Midcap Funds         Invest Online

      1. ICICI Prudential Dynamic Plan
      2. HDFC Top 200 Fund
      3. UTI Dividend Yield Fund
      4. Birla Sun Life Front Line Equity Fund
      5. Franklin India Prima

C. Mid and SmallCap Funds          Invest Online

      1. Reliance Equity Opportunities Fund
      2. DSP BlackRock Small & Midcap Fund
      3. Sundaram Select Midcap
      4. IDFC Premier Equity Fund
      5. Birla Sun Life Dividend Yield Plus
      6. SBI Emerging Businesses Fund
      7. HDFC Mid-Cap Opportunities Fund
      8. ICICI Prudential Discovery Fund

D. Small and MicroCap Funds   Invest Online

      1. DSP BlackRock MicroCap Fund

2.       Franklin India Smaller Companies

E. Sector Funds          Invest Online

      1. Reliance Banking Fund
      2. Reliance Banking Fund
      3. ICICI Prudential Banking and Financial Services Fund

F. Tax Saver Mutual Funds      Invest Online

1. ICICI Prudential Tax Plan

2. HDFC Taxsaver

      1. DSP BlackRock Tax Saver Fund
      2. Reliance Tax Saver (ELSS) Fund

G. Gold Mutual Funds        Invest Online

      1. Relaince Gold Savings Fund
      2. ICICI Prudential Regular Gold Savings Fund
      3. HDFC Gold Fund
      4. Birla Sun Life Gold

H. International funds         Invest Online

1. Birla Sun Life International Equity Plan A

2. DSP BlackRock US Flexible Equity

3. FT India Feeder Franklin US Opportunities

4. ICICI Prudential US Bluechip Equity

5. Motilal Oswal MOSt Shares NASDAQ-100 ETF

 

No comments:

Post a Comment

Mutual Fund Application Forms Download Any Applications
Invest in Tax Saving Mutual Funds Invest Online
Infrastructure Bond Application Forms Download Applications

Popular Posts