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Business Standard

Don't panic if there's a downgrade in your debt fund

Medium and long-term funds always face credit risk. If you can't stomach volatility, stick to FDs

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Debt Funds

Tinesh Bhasin  |  Mumbai 



Don't panic if there's a downgrade in your debt fund

Debt fund investors don’t need to panic if they suffer interim losses during to rating downgrades of companies in their debt mutual fund schemes. Experts say that as long as the exposure of the fund to such downgraded paper is limited to five-seven per cent, there should be no reason to get too worried. “Most think that are risk-free. If they give you better returns than a bank fixed deposit, they have to take more risk,” says Kunal Bajaj, founder and CEO at Clearfunds.

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First Published: Wed, May 31 2017. 23:36 IST

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