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POSTED BY ON April 3, 2012 3:56 pm COMMENTS (8)
I recently redeemed an equity mutual fund. I wish to invest the amount (10k) in a debt fund and then after maybe 6 months to 1yr, move the profits to an equity fund. Since I might have need for this money within one year, I’m not looking at funds with exit loads. I’ve read that one of the criteria for selecting debt funds should be that the avg maturity of the instruments in the fund should be less than our investment horizon. Is this really a big factor to consider?
Can folks here suggest good debt funds?
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Principal Cash Management Fund is also a good liquid fund option…
If you need funds within 1 year, then better invest into Liquid funds such as HDFC Cash Management Fund or Reliance Liquid fund.
Regards
BFA
Thanks for the answers folks. I did consider SBI Dynamic Bond,bBut it has an exit load of 1%.
Manish, I did not consider FD since the returns would be lower and I cannot exit whenever I want.
Dear Jitin, the 9+% return from bank FDs is lower for you? Knowing fully well that there is no guarantee of performance in MFs? & Who told you that you can’t break your FD in between, In fact the money is more liquid in FDs then any of your Debt fund.
Thanks
Ashal
Why dont you just do a FD in that case if you know that after 6 months – 1 yr you will again put the money in Equity funds .. I am just saying that from simplicity points , nothing else !
Hi Ramesh,
Escorts Income Plan (G):
Period (In Years) : 5 y 3 Y 2Y 1Y 6M 3M 1M
Rank : 6 2 1 1 2 1 46
Returns : 9.2 8.9 9.8 14.2 6.8 3.4 0.4
This fund is very strong than any other fund.
Check it out here
http://www.moneycontrol.com/mutual-funds/performance-tracker/ranks/debt-long-term.html
My suggestions:
1) Templeton low duration fund
2) Templeton Income builder fund (option B) or Short-term Income Return fund.
You can go for Escorts Income Plan (G) and SBI Dynamic Bond Fund (G).
But Escorts Income Plan (G) is the best Debt Fund