This is the archive of all our articles related to debt mutual funds
Here is a comparison between three types of funds (by choosing one in each category): Short-term gilts funds, Long-term gilt funds and ultra short-term gilt funds. In this post, I would like to reiterate a point made earlier about staying away from gilt funds unless we know how to trade in accordance with interest cycle…
Continue reading →Dynamic bonds are debt mutual funds with a flexible investment strategy. There is a perception that they funds can be used to take advantage of interest rate movements to maximise gains. Unfortunately, these funds do not reward investors enough for the effort and risk involved in its investment strategy. Which is why I believe that…
Continue reading →There are two ways in which an investment in a debt mutual fund grows: (1) by buying bonds with high coupon rates and holding them until maturity. The growth in this case is by accrual of interest. (2) by choosing long-term bonds issued by the government and aim for capital gains when the bond price increases due…
Continue reading →Here are step-by-step instructions for choosing a liquid mutual fund. This post is inspired from a comment by Firoz Hajiani. I think the following steps might help the reader become familiar with some of the aspects that govern debt fund selection. The first question to answer is, Why choose a liquid fund? Many ‘experts’ suggest that…
Continue reading →If my financial goal is 15-plus years away, PPF is an obvious and pretty good choice for a debt instrument while trying to put together a diversified portfolio. ‘Which debt mutual fund should I choose for the same purpose, if my goal is less than 15 years away?’, is a question that is asked often enough….
Continue reading →Since the time my step-by-step guide to selecting (Equity) mutual funds become popular, I have been receiving requests to publish a similar guide for debt mutual funds. Well begun is half-done. If an investor can confidently select categories suitable for their financial goals, short-listing a set of funds from that category is that much easier….
Continue reading →This is a guest post by Aditya Veera. Aditya has studied and worked in finance, but this is the first article on investment he has written. Hopefully it is not the last. He holds an MSc from the London School of Economics and has an evangelical fervour for low-fee, passive investments! You can find his…
Continue reading →This simple Monte Carlo simulator gives you the probability of a debt fund, with variable annual returns, outperforming a fixed deposit. If you are thinking about investing in a debt mutual fund, but are worried about fluctuating returns (volatility) – especially after the recent crash in bonds, this tool could answer a pertinent question: What…
Continue reading →There are many articles on the web that talk about the difference in the way debt mutual funds and fixed deposits are taxed. Almost all of them (including the ones by self-proclaimed beacons of financial literacy) talk about post-tax returns typically over 3-5 year periods. To my knowledge there is only one article, written by…
Continue reading →A few days ago Subra called me to discuss a calculator idea: a comparison between a lumpsum investment made in a bank fixed deposit and a debt fund, like a income fund, over a period of several years. Interest from a bank FD has to be declared each year and will be taxed according to…
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