[THREAD] Simplest explanation of the types of debt funds available in Indian market:

(1) Overnight Fund: Invests in overnight securities having a maturity of 1 day.

(2) Liquid Fund: Invests in debt and money market securities with maturity of up to 91 days only.

(3) Ultra Short Duration Fund: Invests in debt & money market instruments such that the Macaulay duration of the portfolio is between 3 - 6 months.

(4) Low Duration Fund: Invests in Debt & Money Market instruments such that Macaulay duration of the portfolio is b/w 6-12 months.

Macaulay duration: It is the time an investor would take to get back all his invested money in the bond by way of periodic interest as well as principal repayments.

(5) Money Market Fund: Invests in money market instruments having maturity up to 1 year

(6) Short Duration Fund: Invests in debt & money market instruments such that the Macaulay duration of the portfolio is between 1-3 years.

(7) Medium Duration Fund: Invests in debt & money market instruments such that the Macaulay duration of the portfolio is between 3-4 years.

(8) Medium to Long Duration: Invest in debt & money market instruments such that the Macaulay duration of the portfolio is between 4-7 years

(9) Long Duration: Investment in debt & money market instruments such that the Macaulay duration of the portfolio is greater than 7 years.

(10) Dynamic Bond Fund: Investment across durations

(11) Corporate Bond: Min. 80% of total assets invested in corporate bonds (only in highest rated instruments)

(12) Credit Risk Fund: Min. 65% of total assets invested in corporate bonds (in below highest rated instruments)

(13) Banking & PSU Fund: Min. 80% of total assets invested in debt instruments of banks, Public Sector Undertakings, Public Financial Institutions.

(14) Floater Fund: Min. 65% of total assets invested in floating rate instruments.

(15) Gilt Fund: Min. 80% of total assets invested in G-Secs. (different maturity date)

(16) 10Y Gilt Fund: Min. 80% of total assets invested in G-Secs such that the Macaulay duration of the portfolio is equal to 10 years.

--THREAD End--

These topics are complex & deep; this thread was just the simplest explanation of them all.

Research & then invest. Correct me if am wrong anywhere

Thread cc: @dmuthuk @Vivek_Investor @AnyBodyCanFly @JEEVANRATH