Investment in Debt

POSTED BY rakesh ON July 20, 2013 11:09 pm ONE COMMENT

I have invested some money in the following
BSL Income Plus
IDFC Dynamic Bond
kotak Bond Plan
SBI Magnum Income
SOME QUERIES
What does it mean if there is negative return in a month
I have opted for qtrly dividend Will I get dividend or there may be no dividends too
what is the expected rate of returns over a period of one year
any lock in
Would appreciate a reply

One reply on this article “Investment in Debt”

  1. BanyanFA says:

    Rakesh,
    Debt funds have two returns combined into one :
    1. The return of interest payouts on investments done by the fund
    2. Capital gain on investments due to movement of interest rate in the economy.

    The return on point 1 is generally between 8-12%. However, point 2 tends to fluctuate the overall return of a debt fund from being negative to over 20%. In the current economic situation, I would expect debt funds to give a return of around 9-12% over next 1 year.

    There is generally no lock in period for debt funds. However, there would be an exit load of around 1% if you sell before 1 year.

    You won’t get any dividend if the fund doesn’t declare any. However, generally the fund ends up declaring dividend based upon your dividend frequency.

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