FUND
NAV
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FUND
NAV
Squeeze the most out of your trades with Lemonn - your right investment partner.
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FUND
NAV
Overview
Debt Funds invest primarily in bonds, money-market instruments, and other fixed-income securities.
This page can serve as a broader debt category for schemes that provide fixed-income exposure but may not map neatly to one of the more specific duration, credit, or issuer-based filters displayed on the platform.
Investors should always check the underlying scheme classification before investing.
Explained
Debt Funds pool investors' money and invest it in fixed-income securities.
These can include:
Different debt strategies can carry very different levels of interest-rate, credit, and liquidity risk.
Explained
A debt security generally represents money lent to an issuer.
The issuer promises to make specified payments according to the security's terms.
Mutual fund returns can come from interest earned and changes in bond prices.
The scheme's NAV may therefore rise or fall even when the underlying bonds continue paying interest.
Suitability
Debt Funds may suit investors who want:
An investment matched to a particular time horizon.
Alternatives to individually selecting bonds.
The individual scheme must still be evaluated on its own merits.
Advantages
Investors can choose from very short maturity to long-duration strategies.
Fund managers analyse interest rates, issuers, credit ratings, and liquidity.
A mutual fund can hold multiple securities rather than a single bond.
Many open-ended debt funds allow redemption on business days, subject to applicable terms.
Different debt categories can serve different roles, from short-term cash management to deliberate duration or credit exposure.
Before you invest
Longer-duration funds generally respond more strongly to changes in yields.
Lower-rated issuers can offer higher yields but carry greater credit risk.
Some securities can become difficult to trade during market stress.
YTM provides useful portfolio information but is not guaranteed investor return.
Expense ratios directly reduce returns.
Check whether a fund is formally classified as Liquid, Corporate Bond, Gilt, Credit Risk, Duration, Index, or another debt strategy.
Taxation
Where the fund meets the Section 50AA definition of a Specified Mutual Fund, relevant units acquired on or after April 1, 2023 can be treated as short-term capital assets on transfer, redemption, or maturity.
Gains are generally taxed at the applicable investor rate.
Always confirm the actual scheme's portfolio and tax classification.
Step by step
Good to know
No. Debt fund returns and NAVs are market-linked.
Yes. Rising yields, credit events, or liquidity problems can create losses.
It depends on the scheme. Interest-rate risk, credit risk, and liquidity risk are among the most important.
No. It is a portfolio measure and does not guarantee actual investor returns.
Start with your investment horizon, then assess duration, credit quality, liquidity, costs, and taxation.
Recap
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FUND
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