No Exception From Market Risks: What Should be the Ideal Fixed Income Asset in Your Portfolio?

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You have heard it a thousand times.

“Mutual funds are subject to market risks.”

With a brief introduction to mutual funds, learning about equity mutual funds causes investors to have a wrong impression.

“Debt mutual funds are safe.”

But it is not anyone’s fault. It is a relativity trap, often called anchoring bias.

Debt mutual funds are relatively safer than equity mutual funds. It doesn’t mean they are inherently safe.

A large number of Indian investors learned it the hard way in recent years. There have been defaults, liquidity issues and debt fund windups that rocked the debt mutual funds arena.

Now more investors are aware of the fact that,

“Even debt mutual funds are subject to market risks.”

While it clarified a dangerous misconception, it also posed a more serious question to the investors. The best fixed-income investment instrument is no exception to market risks.

Does that mean debt mutual funds lost their halo ring?

Then, what is the best fixed-income asset?

We asked an industry insider the same question. He broke down the myths into simple raw facts.

If you have the same questions, find out your answers in the video below:

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