Mutual funds (MFs) which invest in debt related instruments such as bonds and debentures account for two-thirds of the assets under management of the industry. But they usually don't find much space in the portfolio of many retail investors because of the lack of understanding of such products.
Experts insist that debt focused schemes should be part of portfolio as it would be useful in striking the right balance. "Debt mutual funds offer a range of products. But not too many average retail investors are aware of the available options," says an industry official.
From highly liquid funds that invest in short-term money market securities to fixed maturity plans(FMPs) that have a longer tenure, the investor can choose the product that suits his or her requirements . "Debt funds can be used by common investors as well. They can balance their portfolio," says Suresh Sadagopan, certified financial planner.
But the only hitch is that unlike traditional products such as bank FDs, debt funds would not be able to give a specific rate of return.
Source: http://timesofindia.indiatimes.com/business/international-business/Make-debt-funds-an-essential-part-of-investment-portfolio/articleshow/7090419.cms
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