can anyone explain me in own words and in simple words , what are the debt schemes meaning in Mutual funds , and how the closure of 6 debt schemes affected the mutual funds
Hi Megha ,
Debt Funds are those funds which have been focussed on investing in low risk Vehicles and are mostly invested by people who do not want to risk their capital much where as Equity Funds are the one which are invested into Riskier Ones and are usually invested by the people who want to take risks as these stocks have high upside potential
Debt Funds offer more than FD ( Fixed Deposit ) might be ranging till 12 - 15 % whereas Equity can go to near about 20% but it has a huge volatility. I am also adding the link of the 6 schemes that were closed : https://www.moneycontrol.com/news/business/franklin-templeton-india-shuts-6-credit-risk-oriented-funds-due-to-market-illiquidity-5183701.html
Now if i talk that how the closing of 6 Schemes affected for the common man is that it just locked in the capital of the people who invested in it, for which now the others also have check for their investments being locked and the other people might also think whether they should withdraw their Capital before any such thing happens with them, i also have some mutual funds that i have invested and after this particular event i saw some of my profIts fading due to people exiting the funds.
Hope it helps
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