4 good debt funds for low-risk investments

Mutual Funds | admin | March 23, 2011 at 11:09 am

Debt funds usually invest in fixed income instruments that may, sometimes, also offer capital appreciation. Lower volatility makes debt funds less risky than equity funds.

Canara Robeco Income Fund

The fund has given an annualized return of 13.34% in the last 3 years as on 11th February 2011. Canara Robeco Income fund was launched in September 2002 with an objective to generate income through investment in debt and money market securities of different maturity and issuers of different risk profiles. The fund in the 1 week and above period has consistently given an above average performance.

On risk-return parameter the fund is regarded as the below average risk fund with a capacity to generate above average returns. As per January 2011 portfolio, the fund has invested in highly rated debentures, CD, CP and government securities. It has invested 12.01% in AAA rated securities, 54.80% in P1+, 17.04% in government securities and remaining 16.15% it holds as cash & call money.

Sahara Income Fund

The fund has given a return of 9.62% in last 3 years as on 11th Feb, 2011. The fund was launched in February 2002 with an objective to generate regular income and the secondary objective is growth of capital through investment in debt instruments, money market and related securities, while at all times emphasising the importance of capital preservation.

The fund has invested 97.64% of the net assets in P1+ securities which denotes highest credit quality. Instruments in this category carry the lowest credit risk in the short term. It has been graded as a low risk fund with a capacity to generate above average returns.

BNP Paribas Flexi Debt Regular

The fund has registered an annualized return of 9.32% in last 3 years as on 11th Feb 2011.

The fund is an open-ended debt equity scheme launched with an aim to generate income through investments in a range of debt and money market instruments of various maturities to maximise income while maintaining an optimum balance between yield, safety and liquidity.

As per January 2011, fund has invested 60.23% of the portfolio in AAA rated idfc mutual fund securities, 34.74% of the portfolio in AA securities and holds 4.67% of the portfolio in cash & repos.

IDFC SSI Medium Term

The fund has given a return of 8.56% in last 2 years as on 11th Feb 2011.

The fund was launched in July 2003 with an objective to generate stable returns with a low – risk strategy by creating a portfolio that is invested in good quality fixed income and money market securities.

As per January 2011 portfolio, the fund has invested mainly in highly rated papers.

Source: Economic Times