Samco Debt Mutual Fund

Investment Objective

Samco Debt Mutual Fund schemes seek to offer investors consistent returns and capital safety over the short to medium term. These funds make investments in fixed-income securities such as treasury bills, government securities, and other money market instruments. The fund manager will select the debt securities based on the fund's investment goal and underlying ratings. An investor in a debt fund would get an excellent Samco Debt Mutual Fund return through interest payments and a steady rise in the fund's value over the specified time frame. The Samco Debt Mutual Fund performance does not promise that the investment goal will be met.

Risks Involved in Samco Debt Mutual Fund

Samco Debt Mutual Fund risk ranges from minimal to moderately high compared to equity funds. The value of the fund may fluctuate depending on how much the underlying debt security costs. The rate of interest, governmental initiatives, tax regulations, and other economic changes may have an impact on the cost of debt securities. The duration of the portfolio and the typical maturity have an impact on the Samco Debt Mutual Fund risk as well. Before investing in the Samco Debt Mutual Fund schemes, investors must consider their own risk tolerance.

Return Potential of Samco Debt Mutual Fund

Samco Debt Mutual Fund returns are high as compared to conventional fixed-income investments. Over a period of five years, Samco Debt Mutual Fund returns on an average of 7% - 10%. The tenure of the loan funds and credit ratings both affect the level of returns. The Samco Debt Mutual Fund returns are not guaranteed, and the performance of the fund may change over time.

Who Should Invest in Samco Debt Mutual Fund?

Cautious investors looking for capital growth and consistent income will be happy with the best Samco Debt Mutual Fund. These funds could add stability to an equity-oriented portfolio as they are more stable than equity funds. The Samco Debt Mutual Fund NAV might support you in boosting your overall income. Debt fund investments may be the most tax-efficient ones for long-term investors in higher tax bands.

Things To Consider Before Investing in Samco Debt Mutual Fund

The following things must be considered before investing in a Samco debt mutual fund scheme.

Expense Ratio

The cost ratio is the total of all expenditures made during the operation of the debt fund plan. Because debt funds have lower returns or upside potential than equity mutual funds, the expense ratio is more important.

Maturity and Duration

Debt mutual funds are more exposed to interest rate swings. In general, bond prices and interest rates have an inverse relationship. It depicts how interest rate rises affect the NAV of debt funds. The debt fund is more vulnerable to interest rate hikes as the adjusted period lengthens, and vice versa.

Yield to Maturity

The yield to maturity of a debt fund is the projected return rate if all securities in the portfolio are held to maturity.

Interest Rate

The interest rate regime would have a significant impact on the attractiveness of debt funds. In a dropping interest rate environment, previously issued bonds would be worth more than freshly issued bonds. As interest rates rise, the value of previously issued bonds falls as investors choose to invest in freshly issued bonds with higher interest rates.

Credit Risk Rating

Debt funds are vulnerable to credit risk as well as interest rate risk. Credit rating organisations rate debt securities based on the issuer's creditworthiness and ability to repay.

Tax on Samco Debt Mutual Fund

According to the Finance Bill 2023, any capital gain on the redemption of debt funds obtained on or after April 1, 2022, shall be taxed at the corresponding income tax slab rate. Take notice that only debt mutual funds will lose LTCG tax benefits if their equity assets do not reach 35%.