Discover and read the best of Twitter Threads about #debtfunds

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When someone says the word #SIP, most of us associate it with equity #mutualfunds. But did you know that SIPs are possible in the fixed income asset class as well?
#Debt SIPs can be one of the most useful ways to meet your short term goals, recurring goals, and asset allocation needs.
SIPs in #debtfunds can be used to meet yearly school fees, build an emergency reserve, your annual vacation, regular recurring expenses, working capital, etc.
Read 8 tweets
8 questions to ask before you invest in a Credit Fund.

Q1) How much yield should the fund offer?
A) The principle of 'higher-the-better' does not apply to credit funds. Higher yields come with disproportionately higher risks. Funds offering 11%+ are a clear avoid. Thread 1/8
Q2) How diversified is the fund?
A) A fund with higher diversification is less risky. As per regulations, exposure in a company cannot exceed 10%. Well managed funds cap exposure in one company to 5% or lower. Lower exposure means lower hit on return if an accident happens. 2/8
Q3) Does the fund have high exit loads?
A) Usually exit loads ensure that investors allow fund managers time to execute strategies. However, very high exit loads often result in debt-traps restricting investors' exit even when there are glaring mistakes made by fund-managers. 3/8
Read 12 tweets

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