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The Mutual Fund Show: Get Your Basics Right Before Investing In Debt Funds

Over the past six months, debt funds have become as risky equities.

A father helps his daughter draw in a notepad at their home in New Delhi. (Photographer: Prashanth Vishwanathan/Bloomberg)
A father helps his daughter draw in a notepad at their home in New Delhi. (Photographer: Prashanth Vishwanathan/Bloomberg)

There was the perception that debt funds were free of risk. The last six months have shown that they can be as risky as investing in equities—due to the liquidity crisis at non-bank lenders spurred by IL&FS group's defaults.

Amol Joshi, founder, Plan Rupee Investment Services, and Amit Bivalkar, director of Sapient Wealth Advisors, talk about the risks associated with debt funds in BloombergQuint’s weekly series The Mutual Fund Show.

Opinion
Why Mutual Funds Are Averse To Segregating Stressed IL&FS Assets

Advisors suggest investors must be wary of funds with higher yield to maturity and concentrated debt portfolio, besides urging them to read fact sheets before investing in any fund.

To know more, watch the full conversation here: