Those funds which generate returns by investing in the government bonds, treasury bills, commercial paper, credit-rated papers, and other money market securities are known as debt funds. The investors with a moderate risk appetite can invest in the fund which will provide them fixed interest. These debt category funds are also offered by Tata Mutual Fund.
One of the most trusted brands in India, Tata Mutual Fund provides the investment option to every investor, either a businessman, a salaried person, retired man or any household person. The fund house works on providing consistent and long-term returns to the investors. Various debt funds offered by it are discussed below.
Who Should Invest in the Debt Schemes of Tata Mutual Funds?
When an investor is of conservative nature, then the financial advisors suggest them to invest in the debt schemes. Therefore, the investors who do not want to take much risk on the principal amount can invest in this category of funds.
Various schemes have different investment horizon in this category. In liquid funds, you may invest for a day also, whereas, in low duration fund, you can invest for six to 12 months.
For medium-term investments, you may select the gilt and credit opportunities funds, with a minimum investment horizon of 3 to 5 years. The short-term debt funds are also offered by Tata MF. In that scheme, you may invest if you have an investment horizon of 1 to 3 years.
Debt Mutual Funds of Tata AMC:
Tata Treasury Advantage Fund (G)
It is a low duration fund with a portfolio of Macaulay duration between 6 months to 12 months. The open-ended scheme was launched in the year 2005, has delivered the returns of 7.98% since launch. The fund manager, Mr Akhil Mittal select the securities by balancing them on various parameters such as issuer credit rating history, the financial track record of the issuer, corporate governance track record of the issuer, interest rate, etc.
In past years, since launch, the fund has consistently outperformed its benchmark as well as category average, which tells that the fund management team is working efficiently to provide good returns to the investors. Its five years compounded returns were 8.41% as provided on Aug 20, 2018.
Tata Short Term Bond Fund (G)
Suitable for the investors with a short to medium term investment horizon, the fund aims at providing accrual income to investors. It is managed by the head of fixed income of the fund house, Mr Murthy Nagarajan who has generated the returns of 7.69% since launch, i.e., 2002. The fund management team focuses on the quality portfolio which offers accrual return generation with better liquidity.
In the past five years, it has generated the returns of 8.38% beating its benchmark as well as the category’s average. Currently, the fund is majorly investing in the AAA rated securities.
Tata Gilt Securities Fund (G)
Some funds only invest in the government securities which are high-rated with very low credit risk. Tata Gilt Securities Fund is one such scheme which predominantly invests in the government securities, and aims to generate medium to long-term capital appreciation for investors. The fund was launched in the year 1999, and since then, it has generated the returns of 8.75%.
The fund is good for moderate risk appetite investors, as it offers less risk than corporate bond funds and high returns than short-term debt funds. It is managed by Mr Naresh Kumar, which has given the returns of 8.68% in the past five years, as provided on Aug 20, 2018.
Tata Liquid Fund (G)
Almost a risk-free investment scheme, Tata Liquid Fund (G) is where you can invest even for a day. Tata Liquid Fund is ideal for the investors who have idle money and are willing to generate tax efficient returns. It is an open-ended fund which generates reasonable returns with keeping high liquidity in the portfolio.
The fund invests in the securities which have an average maturity period of 91 days. It has been managed by Mr Amit Somani, under whom the fund has given the returns of 7.37% since 2003. The fund has given the returns of 8.02% in the past five years.
All these debt category schemes of Tata Mutual Fund have been analysed on various parameters, who are even offering good returns in the long run. Providing approximately 8% returns, these funds even try to optimize returns by keeping the portfolio diversified.