Debt mutual funds invest primarily in fixed-income securities like government bonds, corporate bonds, and money market instruments. These funds are ideal for investors seeking stable returns with lower risk compared to equity investments.
Types of debt funds include:
- Gilt Funds: Invest in government securities with minimal credit risk.
- Corporate Bond Funds: Focus on high-rated corporate bonds for better yields.
- Liquid Funds: Provide high liquidity and are suitable for short-term investments.
Examples of popular debt funds are SBI Magnum Gilt Fund and HDFC Corporate Bond Fund.