This is the second article in a series of articles on simplifying debt mutual fund investors. The first part can be read at “Part 1 – Debt Mutual Funds Basics“.
I have already given you a basic understanding of when we actually have to look for debt mutual funds. In this post, I will explain to you certain advantages ONLY. We have to concentrate on DISADVANTAGES in a big way. Hence, I will cover each disadvantage in a single separate post.
Advantages of Debt Mutual Funds
# Liquidity – You can invest and withdraw at any point of time (subject to exit load and taxation). Hence, they offer greater liquidity for the investors.
# Diversification – Instead of holding a single bond, debt mutual funds usually hold a bunch of bonds of different maturities or of the same maturities based on the fund mandate. Hence, you are reducing the risk of exposing yourself to a single issuer.
# Taxation – Even though post 1st April 2023, the taxation of debt mutual…
