Debt Funds: Stabilize Portfolios, Don't Chase Wealth, Say Experts
Personal Finance
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CNBC TV18•06-01-2026, 15:49
Debt Funds: Stabilize Portfolios, Don't Chase Wealth, Say Experts
- •Debt mutual funds are primarily for portfolio stability and meeting financial goals, not wealth creation, according to experts Lakshmi Iyer and Abhishek Bisen.
- •Investors should align debt fund duration with their financial goals; short-term goals with liquid/short-duration funds, long-term with longer-duration funds.
- •First-time investors are advised to start with liquid funds due to their lower volatility before exploring other debt categories.
- •Frequent switching between debt funds is discouraged as it can lead to tax implications (short-term capital gains) and reduced overall returns.
- •Experts recommend against timing interest rate cycles; staying invested in a suitable strategy, especially in shorter-duration categories, is more effective.
Why It Matters: Debt funds serve as safety nets for portfolio stability and capital protection, not as tools for aggressive wealth creation.
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