Hi, I am planning to allocate some amount of monthly investments in debt funds. I have good experience in equity funds but new to debt funds. Could some one help me for these queries
I am adding debt funds with expectation of 6-8% (better than FD’s). Another reason for adding debt funds is to make my portfolio to look green even when equity portion goes down. My tenure is 3+ years.
- Do monthly SIP in debt funds meaningful?
- Are debt funds better than arbitrage funds?
- Is FD better than debt funds considering interest rate hikes?
- Are gilt funds safer than corporate bond funds?
- Which debt fund category is safest?
- Which debt fund category yields high returns among debt category?
- Considering rate hikes in near term future, is it worth investing in debt funds now?
- Should we analyze the holdings of debt funds (AA, AAA+…) for selecting a debt funds?
Also, if you share me the debt funds in your portfolio, it will be useful for me to analyze more
I am not an expert but my two bits are
You should hold on to your investment in debt fund for sometime as rate hikes are going to happen. There is a monetary policy this month end and one in December. If I were you, I would park my money in SB account and wait for some time and check how much more rate increase might happen. Thereafter decide on debt fund
Disc: I am always biased towards FD. So please take the above with a kilo of salt.
@KANAGU explaining all the nitty gritty of debt fund on this forum would be slightly difficult.
Varsity has some good training material on debt fund. You can give it a try
This should answer lot of your questions. After that if you still have questions, you can raise it here.
I mainly hold 4 types of debt funds
- Constant maturity gilt fund – for my long term goal (15+ years). I do SIP in this
- Banking and PSU debt fund – 5+ year goal.
- Target maturity debt funds (mainly bharat bond and various SDL bonds) – This I treat as my FD investment. money which is needed after fixed terms
- Liquid fund – spare / emergency money
Hope this helps