Rahul Jain, President & Head of Nuvama Wealth, emphasises the importance of clear financial planning for investors considering fixed income funds. He suggests that investors should first determine their time horizon, establish return expectations, and assess their risk tolerance before making investment decisions.
Fixed income mutual funds, also referred to as debt funds, allocate capital to assets such as bonds and money market instruments, aiming to provide lower-risk investments with stable and predictable returns. Typically, fixed income funds offer lower returns compared to equity funds.
Jain points out that fixed income funds offer an attractive alternative to traditional fixed deposits, allowing investors to navigate the interest rate cycle. Given the current peak in interest rates, he believes that this is an opportune moment to consider investing in fixed income funds.
It's important to note that debt funds are subject to taxation at the maximum marginal rate of your income tax slab.
Watch accompanying video for entire conversation.
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