Debt mutual funds have been increasingly popular in the recent years.
Different types of debt mutual funds:
Over the years, debt funds have evolved into something very broad.
Liquid funds are generally used by investors to park excess amounts of money for a short period of time.
Though this may seem less than other debt funds, liquid funds actually have a lot of benefits such as liquidity, etc.
Such funds are suitable for those with a low to moderate risk appetite, and a short-term investment horizon.
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When a bunch of investors with a common financial goal invest in a mutual fund, a pool of money is created.
In order to yield returns to our investors’ portfolio, the money is later managed by professional fund managers, who invest in bonds, stocks & various other money market instruments.The First Concept- Mutual funds are believed to be first traced back in the year 1774 by a dutch merchant Adriaan van Ketwich.
In the year 1772-73, his clients suffered a major loss, as an investment in the British East India Company didn’t turn out ideal.Bearing the heavy loss in mind, Ketwich came up with the concept of diversification of investments.
This eventually reduced the risk of loss to budding and existing investors.
In 1987 UTI saw the birth of public sector mutual funds.
Sectors like Life Insurance Corporation of India (LIC), SBI Mutual Fund, Punjab National Bank Mutual Fund, Indian Bank Mutual Fund, Bank of Baroda Mutual Fund & many more surfaced.