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Debt Funds

Printed From: The Equity Desk
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URL: http://www.theequitydesk.com/forum/forum_posts.asp?TID=176
Printed Date: 18/Apr/2025 at 6:26pm


Topic: Debt Funds
Posted By: anilchau
Subject: Debt Funds
Date Posted: 15/Aug/2006 at 8:11pm
Are any Debt Funds in India good buys? What procedure does one follow to identify the good debt funds?


Replies:
Posted By: basant
Date Posted: 15/Aug/2006 at 8:57pm
Hi,
 
To identify good debt funds you would need to look at
Expense ratio
Credit quality
Average maturity
 Hwile there would not be much of a difference between the first two since we do not have classifications as junk bond funds etc in India the average maturity is something that investors should watch out for.
 
When interest rates rise the bond prices fall and so will the price of your bond fiund. Here it is important to note that funds that have a alonger maturity will fall the hardest.
 
So it would not make sense to put money in a debt fund right now. ALternatively you may invest into floating rate funds typically called "floaters" and wait for another quarter before transferring that money into a apure bond debt fund.

 


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