1. Debt funds are supposed to protect capital and also try to give some positive returns on it.
2. Maturity periods of underlying securities play a major role to fulfill these twin objectives as their returns (interest rate) differ for various terms as per demand-supply in market.
3. Unlike earlier, SEBI has now ensured that investors are not mis-sold a "general" fund for their "specific" need-based goals.
4. Hence, up to 3 years maturity Debt funds have also been segregated further into six categories, as per durations, of:
a) 1 day (overnight),
b) 91 days (liquid),
c) 3-6 months (ultra-short duration),
d) 6-12 months (low duration),
e) upto 1 year (money market), and
f) 1-3 years (short duration).
5. This enables investors to exercise their own choice for "specific" short-term needs.
2. Maturity periods of underlying securities play a major role to fulfill these twin objectives as their returns (interest rate) differ for various terms as per demand-supply in market.
3. Unlike earlier, SEBI has now ensured that investors are not mis-sold a "general" fund for their "specific" need-based goals.
4. Hence, up to 3 years maturity Debt funds have also been segregated further into six categories, as per durations, of:
a) 1 day (overnight),
b) 91 days (liquid),
c) 3-6 months (ultra-short duration),
d) 6-12 months (low duration),
e) upto 1 year (money market), and
f) 1-3 years (short duration).
5. This enables investors to exercise their own choice for "specific" short-term needs.