Just as we learnt
about the various equity mutual fund schemes, the debt funds too are of different
types. The Securities and Exchange Board of India (SEBI) SEBI has categorized
them into 16. Yeah, you read that right!
All these are
open-ended debt schemes. Let’s have a look at them.
|
Scheme |
Characteristics |
|
Overnight Fund |
Invests in
overnight securities having maturity of 1 day.
|
|
Liquid Fund |
Invests in debt
and money market securities with maturity of upto 91 days only
|
|
Ultra Short
Duration Fund |
Invests in debt
& money Market instruments such that the Macaulay duration* of
the portfolio is between 3 months - 6 months.
|
|
Low Duration
Fund |
Invests in debt
& money market instruments such that the Macaulay duration of the
portfolio is between 6 months- 12 months.
|
|
Money Market
Fund |
Invests in money
market instruments having maturity upto 1 year.
|
|
Short
Duration Fund |
Invests in debt
& money market instruments such that the Macaulay duration of the
portfolio is between 1 year – 3 years.
|
|
Medium
Duration Fund |
Invests in debt
& money market instruments such that the Macaulay duration of the
portfolio is between 3 years – 4 years.
|
|
Medium
to Long Duration Fund |
Invests in debt
& money market instruments such that the Macaulay duration of the
portfolio is between 4 – 7 years.
|
|
Long
Duration Fund |
Invests in debt
& money market instruments such that the Macaulay duration of the
portfolio is greater than 7 years.
|
|
Dynamic
Bond |
Invests across
duration.
|
|
Corporate
Bond Fund |
Minimum
investment in corporate bonds is 80% of total assets (only in highest rated
instruments).
|
|
Credit
Risk Fund |
Minimum
investment in corporate bonds is 65% of total assets (investment in below
highest rated instruments).
|
|
Banking
& PSU Fund |
Minimum
investment in Debt instruments of banks, Public Sector Undertakings, Public
Financial Institutions is 80% of total assets.
|
|
Gilt
Fund |
Minimum
investment in Gsecs (Government securities) is 80% of total assets (across
maturity).
|
|
Gilt
Fund with 10 year constant duration |
Minimum
investment in Gsecs is 80% of total assets such that the Macaulay duration of
the portfolio is equal to 10 years.
|
|
Floater
Fund |
Minimum
investment in floating rate instruments is 65% of total assets.
|
*The Macaulay duration is the weighted average term to maturity of
the cash flows from a bond.
If you haven’t read the posts on broader classification of mutualfunds, types of equity and hybrid schemes, am sure you would be keen to go
through them.
