What are Medium Duration Mutual Funds?
Medium Duration Mutual Funds are defined as a type of fund that provides investors with a balanced investment option, between short-term and long-term. These funds primarily invest in debt instruments like bonds and fixed-income securities with a maturity period typically ranging from 3 to 4 years. The main aim of these funds is to offer a ground for investors allowing them to potentially earn returns than short-term funds while keeping the interest rate risk relatively low compared to long-term funds.
Key takeaways from Medium Duration Mutual Funds:
- Medium Duration Mutual Funds are a subset of debt mutual funds that focus on a portfolio of fixed-income securities with a moderate time horizon.
- These funds aim to provide investors with both income generation and a potential for moderate capital appreciation.
- The average maturity of the underlying securities in medium-duration funds is typically around 3 to 4 years.
Table of Content
- Features of Medium Duration Mutual Funds
- Purpose of Medium Duration Mutual Funds
- How do Medium Duration Funds Work?
- Who Should Invest in Medium Duration Mutual Funds?
- Factors to Consider Before Investing in Medium Duration Mutual Funds
- Advantages of Medium Duration Mutual Funds
- Disadvantages of Medium Duration Mutual Funds