{"id":7937,"date":"2025-07-16T12:57:04","date_gmt":"2025-07-16T12:57:04","guid":{"rendered":"https:\/\/lemonn.co.in\/blog\/?post_type=glossary&p=7937"},"modified":"2025-07-16T12:57:05","modified_gmt":"2025-07-16T12:57:05","slug":"fixed-income-mutual-funds","status":"publish","type":"glossary","link":"https:\/\/lemonn.co.in\/blog\/glossary\/fixed-income-mutual-funds\/","title":{"rendered":"Fixed Income Mutual Funds"},"content":{"rendered":"

They’re mutual fund<\/a>s that invest primarily in fixed-income securities<\/strong>—like government bonds<\/a>, corporate bonds<\/a>, treasury bills<\/a>, and money market instruments<\/a>. The aim is to provide regular interest income<\/strong> with lower volatility<\/a><\/strong> compared to equities.<\/p>\n\n\n\n

Types of Debt Funds<\/h2>\n\n\n\n
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  1. Overnight & Liquid Funds<\/strong> – Very short-term; ideal for parking emergency funds safely.<\/li>\n\n\n\n
  2. Ultra‑Short & Low Duration<\/strong> – 2–12 months maturities; moderate returns and low sensitivity to interest rate changes.<\/li>\n\n\n\n
  3. Short, Medium & Long Duration<\/strong> – Maturities vary from 1 year to 10+ years; more sensitive to interest rate shifts .<\/li>\n\n\n\n
  4. Credit Risk Funds<\/strong> – Higher-yield<\/a> bonds with moderate credit risk.<\/li>\n\n\n\n
  5. Gilt Funds<\/strong> – Invest exclusively in government securities—lower credit risk, higher interest rate sensitivity.<\/li>\n\n\n\n
  6. Dynamic Bond & Floater Funds<\/strong> – Interest rate–adaptive, shifting allocation based on rate forecasts .<\/li>\n<\/ol>\n\n\n\n

    Benefits<\/h2>\n\n\n\n