Debt fund classification

Debt Mutual Funds mainly invest in a mix of debt  securities such as Treasury Bills, Government Securities, Corporate Bonds, Money Market instruments and other debt securities of different time horizons.

The following are the 16 classification of debt fund as classified by SEBI (Security Exchange Board of India):

1.  Overnight Fund – Investment in overnight securities having maturity of 1 day.

2.  Liquid Fund – Investment in debt and money market securities with maturity of up to 91 days.

3.  Ultra Short Duration Fund – Investment in debt and money market securities that have duration of the portfolio between 3 to 6 months.

4.  Low Duration Fund – Investment in debt and money market securities that have duration of the portfolio between 6 to 12 months.

5.  Money Market Fund – Investment in money market instruments having maturity upto 1 year.

6.  Short Duration Fund – Investment in debt and money market securities that have duration of the portfolio between 1 to 3 years.

7.  Medium Duration Fund – Investment in debt and money market securities that have duration of the portfolio between 3 to 4 years.

8.  Medium to Long Duration Fund – Investment in debt and money market securities that have duration of the portfolio between 4 to 7 years.

9.  Long Duration Fund – Investment in debt and money market securities that have duration of the portfolio greater than 7 years.

10.  Dynamic Bond - Investment across duration.

11.  Corporate Bond Fund – Minimum 80% investment in corporate bonds with highest rated instruments.

12.  Credit Risk Fund – Minimum 65% investment in corporate bonds in below highest rated instruments.

13.  Banking and PSU Fund – Minimum 80% investment in bonds issued by Public sector banks, Public sector undertakings, Public Financial Institutions.

14.  Gilt Fund – Minimum 80% investment in G-Secs or Government securities across maturity.

15.  Gilt Fund with 10 year Constant Duration – Minimum 80% investment in GSecs such that the duration of portfolio is 10 year.

16.  Floater Fund – Minimum 65% investment in floating rate instruments.