Debt mutual funds have returns that are more predictable and are considered to be of low-risk investments. The return that one gets from this kind of mutual funds is similar to bank’s fixed deposits i.e., returns at par with inflations. Therefore, if someone wants to invest for a shorter period, then this would be the best choice.
Well, debt mutual funds are available in various categories, but the most common are general debt funds, monthly income plans, gilt funds, and liquid funds. One must choose the debt mutual funds according to their investment period. All funds are based on time duration, which can be either for a shorter period or for more than 3 years or so.
Hence, it is very important to choose the best debt mutual funds with respect to qualitative and quantitative measures. Let us have a look at the top debt mutual funds to invest in 2018.
Short-term bond funds:
These are for earning regular returns, where one can get slightly more than the fixed deposit. They are funded by debt securities that can be matured in about one to three years. They are very useful for maintenance of asset allocation for those who are in high tax brackets.
Long-term bond funds:
For investors who want to invest money for a longer period of 3-5 years, then this is the most suitable one. They have the capability to return more than the fixed deposit. These are segregated across different fixed income investments and may be volatile due to a sudden increase in interest rates. Hence, these are risky but worth investing.
Liquid funds:
Liquid funds are also debt mutual funds for a short period and are invested in market instruments such as treasury bills, government securities and call money. They are exceptional in terms of NAV. They also have no entry or exit loads by fund houses.
Ultra short-term bond funds:
They offer better returns compared to other market instruments and prevent investors of interest rate risks. They are considered as “any time money” and therefore, they hold no exit loads.
Hence, these are the leading debt mutual funds for investors to invest in 2018. Based on one’s own suitability, a person may choose them.
