Know Everything About Best Debt Funds In India 2021

Debt mutual funds invest primarily in fixed-income products such as Treasury Bills and Certificates of Deposit. The primary goal of these funds is to build wealth in the form of interest income and long-term capital appreciation. Over the time that investors remain invested in the fund, the underlying assets yield a fixed rate of interest.

Since they are less volatile than equity investments, debt funds are one of the greatest investment options for investors with a low risk tolerance. However, when it comes to choosing debt funds that are most suited to their portfolio, financial goals, and criteria, investors, especially those who are new to investing, sometimes find themselves at a fork in the road. So, before you invest in a debt fund, here's what you need to know.

1. The ICICI Prudential Multicap Fund

The ICICI Prudential Multicap Fund is a diversified equity scheme that invests in a combination of large, mid, and small cap firms. The Scheme attempts to profit from an increase in domestic demand as a result of the economic recovery.

 Benefits of The ICICI Prudential Multicap Fund are as follows:

1) The strategy focuses on picking stocks from a variety of industries that have the potential to become market leaders in the future, resulting in long-term capital gains.

2) The exposure to mid and small caps in the strategy allows for stronger long-term capital appreciation, but the large cap exposure tries to give less volatile and fair returns.

3) The scheme is suited for investors with a 5-year or longer investment horizon who want to take advantage of India's long-term growth potential.

Minimum Application Amount : Rs. 5,000

2. IDBI Credit Risk Fund Direct Growth

A debt fund is IDBI Credit Risk Fund Direct Growth. On March 3, 2014, this fund was established. Bhupesh Kalyani is the fund's manager. This fund is ideal for securing your funds.

Key Features of The Plan

The most important parameters are: 

1) As of November 21, 2021, the NAV of IDBI Credit Risk Fund Direct Growth is 16.1188.

2) As of November 21, 2021, IDBI Credit Risk Fund Direct Growth has assets under management (AUM) of 40 crores, which is less than the category average.

3) The expense ratio of the fund is 0.62 percent.

Minimum Lump Sum/SIP: Rs. 5000/ 500

3. Nippon India Credit Risk Fund Direct Plan Growth Option

A debt fund is Nippon India Credit Risk Fund Direct Plan Growth Option. On January 1, 2013, this fund was established. Kinjal Desai and Sushil Budhia run the fund. This fund is ideal for securing your funds.

Key Factors of The Plan

Important factors to consider:

1) As of November 21, 2021, the NAV of the Nippon India Credit Risk Fund Direct Plan Growth Option is 29.2759.

2) As of November 21, 2021, the assets under management (AUM) of Nippon India Credit Risk Fund Direct Plan Growth Option was 1031 crores, which is less than the category average.

3) The cost ratio of the fund is 1.02%.

Minimum Lump Sum/ SIP: Rs. 500/ 500

Conclusion

The underlying assets are mostly invested in by a debt fund manager depending on their credit ratings. A higher credit score suggests that a debt security has a better possibility of paying interest on time and repaying the principal when the investment term ends. Aside from that, the fund manager adjusts his investing strategy in response to interest rate changes. As a result, after reading this post, you will have a better understanding of the top debt funds available in India.

Also read - Advantages of Investing In Mutual Funds In India

Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.