Concepts and types of Debt funds

[Perro Justy]

Hey I have my software business since 2 years ago and I getting fine profit through my software business. Now, I want to invest my some amount of capital (money) in mutual funds in Debt account. Is this Debt funds companies are private based or not? What actually a Debt fund? I want to know the concept of Debt fund? How it work? What are their types I would get in investing my money in a Debt fund company? Can you help out in this process? I want to know how this work in my business?

[Job-finder]

Yeah, Debt funds are private based, if your business is going good for you then this is good chance for to invest in debt funds. Actually Debt fund comes under mutual fund companies. It is the part mutual fund and most trusted fund sector.Actually mutual funds has 6 parts.Equity Funds, Money Market/ Liquid Funds, Hybrid Funds, Debt/Income Funds, Gilt Funds, Others.
Debt funds is the most trusted fund sector since it produces and a good income to investor so that why its other name of Debt funds is income funds.
So investment in a Debt funds is safer and trust worthy for who wants to get a nice profit through their investment.

[Career-Minded]

Funds that are invested for a medium to long-term debt instruments which are issue by private companies, bank, financial organization , governments and other entities which belongs to different sectors (like pvt. company , telecommunications companies etc.) are called as Debt / Income Funds. Debt funds are small risk profile funds that seek to produce fixed present income (and not capital approval) to investors. In order to make sure regular income to investors, debt (or income) funds hand out large part of their access to investors. Even though debt securities are usually less risky than compare to equity funds securities, they are focus to credit/capital risk by the issuer at the moment of interest or principal payment. To reduce the risk of default, debt funds frequently invest in securities from issuers who are calculated by credit rating agency and are measured to be of "Investment Grade".

[G-MAT]

Suppose we invest high capital in Debt fund it may cause a risk. Debt funds that target big returns are more risky. Based on various investment objectives, there are following types of debt funds:

1. Diversified Debt Funds - Debt funds that invest in all capital may be shares, debentures etc issued by entities which belongs to all sectors of the market are known as diversified debt funds. The best characteristic of diversify debt funds is that investments are properly diversified into all sectors which results in risk decline.
2. Focused Debt Funds - Unlike diversified debt funds, focused debt funds are finely focus funds that are curbed to investments in selective debt securities, issued by companies of a specific sector or industry or origin.
3. High Yield Debt funds
4. Assured Return Funds
5. Fixed Term Plan Series