Debt funds are mutual funds that invest in fixed income securities like treasury bills and bonds. They are generally safer than equity mutual funds. Debt funds are often seen as a tax-efficient alternative to bank FDs.
Debt funds invest in securities of various types: government backed securities, bonds, top rated corporate deposits etc. These securities are usually given a credit rating based on the risk of credit default associated with them. Most debt mutual funds invest in a range of securities depending on their mandate.
Scripbox selection process aims to select funds that provide superior post tax returns compared to FDs with high safety of capital.
|Long term Instrument Ratings||Short term Instrument Ratings||Risk Classification|
|Sovereign||Sovereign||Government Backed Instruments - No Credit Risk|
|AAA||A1||High Degree of Safety - Lowest Credit Risk|
High Degree of Safety - Very Low Credit Risk
Adequate Degree of Safety - Low Credit Risk
Moderate Degree of Safety - Moderate Credit Risk
Moderate Risk of Default
High Risk of Default
Very High Risk of Default
In Default or expected to be in Default on Maturity