Best Fixed Income Schemes to Invest Amidst Coronavirus Crisis

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Fixed income schemes are a popular choice for investors seeking stable returns with low risk. Amidst the coronavirus crisis, some of the best fixed income schemes to consider include liquid funds, ultra-short duration funds, and short-term funds. These schemes invest in high-quality debt securities with low credit risk, providing stable returns with minimal volatility. It’s important to consider the fund manager’s track record, expense ratio, and investment strategy before choosing a scheme. Additionally, investors should maintain a long-term investment horizon and diversify their portfolio across multiple schemes to mitigate risk.

Introduction to Fixed Income Schemes

Fixed income schemes are mutual funds that invest in debt securities such as bonds, government securities, and money market instruments. These schemes aim to provide investors with regular income and capital preservation by investing in high-quality debt securities with low credit risk. Fixed income schemes are a popular investment option for risk-averse investors who seek stable returns with minimal volatility. The coronavirus crisis has caused significant market uncertainty, making fixed income schemes an attractive investment option for investors seeking stability amidst the economic turbulence. In the following sections, we will discuss the best fixed income schemes to invest in during the coronavirus crisis.

Importance of Fixed Income Schemes Amidst Coronavirus Crisis

The coronavirus crisis has had a profound impact on financial markets, causing significant volatility and uncertainty. In this environment, fixed income schemes have become increasingly important for investors seeking stability and safety. Fixed income schemes invest in high-quality debt securities that provide stable returns with minimal volatility. In times of economic uncertainty, these schemes can provide a steady stream of income, protecting investors from market fluctuations. Additionally, fixed income schemes offer diversification benefits, as they invest in a variety of debt securities with varying maturities and credit ratings. This diversification can help mitigate risk and provide a buffer against market downturns. Overall, fixed income schemes are an important investment option for investors seeking stability amidst the economic turmoil caused by the coronavirus crisis.

Best Fixed Income Schemes to Invest

The best fixed income schemes to invest in during the coronavirus crisis include:

Liquid Funds – These funds invest in highly liquid money market instruments such as treasury bills, commercial papers, and certificates of deposit, with a maturity period of up to 91 days. They offer higher returns than savings accounts or fixed deposits and are relatively low-risk investments. Some of the top liquid funds in India include Axis Liquid Fund, Nippon India Liquid Fund, and ICICI Prudential Liquid Fund.
Ultra-Short Duration Funds – These funds invest in debt securities with a maturity period of 3-6 months, making them slightly more risky than liquid funds but offering higher returns. Some of the top ultra-short duration funds in India include Aditya Birla Sun Life Savings Fund, Kotak Savings Fund, and Franklin India Ultra-Short Bond Fund.
Short-Term Funds – These funds invest in debt securities with a maturity period of 1-3 years, providing higher returns than liquid funds or ultra-short duration funds, but with slightly higher risk. Some of the top short-term funds in India include HDFC Short Term Debt Fund, SBI Magnum Medium Duration Fund, and IDFC Bond Fund – Short Term Plan.

Investors should consider factors such as the fund manager’s track record, expense ratio, and investment strategy before choosing a fixed income scheme. It’s also important to maintain a long-term investment horizon and diversify your portfolio across multiple schemes to mitigate risk.

Factors to Consider While Investing in Fixed Income Schemes

When investing in fixed income schemes, there are several factors that investors should consider, including:

Investment Objective – Investors should first determine their investment objective, whether it is to generate regular income, preserve capital, or a combination of both.
Risk Appetite – Fixed income schemes offer varying levels of risk, depending on the maturity and credit quality of the underlying securities. Investors should assess their risk appetite and choose a scheme that aligns with their risk tolerance.
Fund Manager’s Track Record – The fund manager’s track record is an important factor to consider when choosing a fixed income scheme. Investors should look for a fund manager with a proven track record of generating consistent returns.
Expense Ratio – The expense ratio is the annual fee charged by the mutual fund company to manage the fund. Investors should choose a scheme with a low expense ratio, as it can have a significant impact on the returns generated by the scheme.
Credit Quality of the Underlying Securities – The credit quality of the underlying securities in the scheme is an important consideration. Investors should choose a scheme that invests in high-quality debt securities with low credit risk.
Investment Strategy – The investment strategy of the scheme should align with the investor’s investment objective and risk appetite. Investors should choose a scheme that has a well-defined investment strategy and a disciplined approach to investing.
Historical Performance – Investors should assess the historical performance of the scheme and compare it with other similar schemes before making an investment decision.

Overall, investors should carefully evaluate these factors before choosing a fixed income scheme to ensure that it aligns with their investment objectives and risk tolerance.

Conclusion and Recommendations

In conclusion, fixed income schemes are a popular investment option for risk-averse investors who seek stable returns with minimal volatility. During the coronavirus crisis, fixed income schemes have become increasingly important for investors seeking stability and safety. Liquid funds, ultra-short duration funds, and short-term funds are some of the best fixed income schemes to invest in during this time.
When investing in fixed income schemes, investors should consider factors such as their investment objective, risk appetite, fund manager’s track record, expense ratio, credit quality of underlying securities, investment strategy, and historical performance. By carefully evaluating these factors, investors can choose a scheme that aligns with their investment objectives and risk tolerance.
It’s also important for investors to maintain a long-term investment horizon and diversify their portfolio across multiple schemes to mitigate risk. Investing in fixed income schemes requires patience and discipline, and investors should be prepared to hold their investments for the long-term to realize their full potential.

Overall, fixed income schemes offer a safe and stable investment option for investors seeking stability amidst the economic turmoil caused by the coronavirus crisis. It’s important for investors to do their due diligence and choose a scheme that aligns with their investment objectives and risk tolerance.

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