Jan 05, 2017 2 min read

How Investing in Debt Mutual funds via SIP is a Good Choice?

Know how making SIP investment in debt mutual fund is beneficial for the investors looking for financial stability.
Investors for a long time have been advised to make investments in equity-related funds via SIP to combat the stock market volatility rather than investing in debt mutual funds. However, over time, debt mutual funds have started gaining traction and can yield better returns via SIP. In this blog, we have listed out some factors which will convince you about investing in debt mutual funds via SIP.

Below are some parameters which will persuade you to make investments in debt mutual funds without fearing about the falling stock market. Go through them to know more:

  1. Investing in Debt Mutual Funds Enables Disciplined Investing:- Making anable you to invest wisely and in a disciplined manner which eventually can help the investors in the wealth creation. Without the chance of being better or creating wealth increases the case of ,SIPs of disciplined investing.
  2. Investing in Debt Mutual Funds via SIP Can Help You Tackle Market Volatility:- Since the date of purchase of the debt SIP and the investment amount is fixed, the investment is tend to take place irrespective of the market fluctuations. Thus, the overall cost of purchase over the period of time gets reduced. And eventually, the investors can avail the benefit of Rupee-cost averaging. Although debt markets are also volatile, but they do not affect the investment value as in the case of equity markets. Accordingly, purchasing the duration funds during the increasing rate scenario can earn you good returns when the rates start falling.
  3. Choosing the Long-term Debt Funds Can Enhance Your Portfolio:- Debt mutual funds expand across a wide range which mainly includes short and long term debt funds, liquid funds, gilt funds, and so on. Each of these respond differently to the changing market scenario. Investors need to choose the SIP in debt funds according to their risk appetite. To avail the maximum benefits of SIP such as power of compounding and Rupee-cost averaging, the long-term debt mutual funds can prove to be beneficial. Investors who plan to make investment for a period of two to three years can opt for the dynamic bond funds as well.

On a final note, it can be concluded that making SIP investments in debt mutual funds can prove productive and earn you better yield in the future; one just needs to be focused and take an informed decision.

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