Returns from Mutual Funds depend on the kind of investment it makes, and the risks associated with these investments. The taste of a cake differs from that of a samosa because both are made up of different ingredients and are prepared differently. Similarly, equity mutual funds and Fixed Income Funds offer different kinds of returns because of the kind of securities that make up their portfolio and the way these securities generate their returns.
Fixed income funds invest in interest paying securities like bonds, debentures and money market instruments. These securities promise to pay a fixed interest at regular intervals to these Mutual Funds. The rate is closely linked to the prevailing lending rates in the market. Since the issuers of these
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