A Fixed-Income Mutual Fund, (a form of mutual fund) channels investments into fixed-income assets such as corporate bonds, government bonds, money market instruments and other debt securities as per the asset allocation of the Fund and SEBI permissible guidelines and limits. They aim to earn returns through interest and capital growth. This flexibility suits different investment objectives and risk tolerances. Fixed-income Mutual Funds are also called Debt or Bond Funds.
Fixed-Income Mutual Funds provide numerous features for investors, such as:
- Diversification: These funds offer diversification by spreading investments across various fixed-income securities, such as government and corporate bonds, reducing overall portfolio risk.
- Liquidity: Open-ended fixed income funds allow for liquidation, particularly during urgent financial situations as they don’t have any lock-in period
- Relatively Lower Risks: These funds are widely regarded as low to medium
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