Nervous about debt funds? Take a call, depending on your risk appetite

Remember there is an element of risk in almost every investment option. Take a call, depending on your risk appetite

Over the past few months, many new investors would have realised that they could lose money in debt funds, much like equities. With Infrastructure Leasing and Financial Services’ subsidiaries defaulting and more recently, Essel Group entities holding back repayments, it hasn’t been a smooth ride for both investors and fund managers.  

While most investment advisors are still rooting for debt funds, there is a caveat now. 

“Even if one company defaults in the portfolio, an investor can still make 7.5-8.00 post-tax returns in a short-term debt fund if he stays invested for over three years and the scheme doesn’t have