Mutual Fund Schemes: Types of Debt Funds
Mutual fund schemes can be clssified into :
* Equity Funds
* Debt Funds and
* Hybrid Funds
Here types of debt funds are discussed.
Debt funds can be classified as :
* Gilt Funds
* Diversified Debt Funds
* Junk Bond Funds
* Fixed Maturity Plan [FMP]
* Floating Rate Funds
* Liquid Funds Or Money Manager Funds
Gilt Funds
These types of funds invest only in Government securities and Treasury bills. These funds have not risk of default.
Diversified Debt Funds
These type of funds invest in government and non-government debt securities.
Junk Bond Funds
The type of funds invest in companies with poor credit rating with high yield. These are also called High Yield Bonds.
Fixed Maturity Plans
As the name implies, these plans are a type of debt funds where investment is aligned according to maturity. Like close ended funds investment can’t be done post NFO.
Floating Rate Funds
These type of funds invest in debt securities where interest rate changes with market.
You can invest on line in UTI Floating Rate Fund here
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Liquid Funds or Money Manager funds
These type of funds invest in debt securities where the money will repaid within 91 days.