Debt Mutual Funds
A debt fund is a Mutual Fund scheme that invests in fixed income instruments, such as Corporate and Government Bonds, corporate debt securities, and money market instruments etc. that offer capital appreciation. Debt funds are also referred as Fixed Income Funds or Bond Funds.

A few major advantages of investing in debt funds are low cost structure, relatively stable returns, relatively high liquidity and reasonable safety.

Debt funds are ideal for investors who aim for regular income, but are risk-averse. Debt funds are less volatile and, hence, are less risky than equity funds. If you have been saving in traditional fixed income products like Bank Deposits, and looking for steady returns with low volatility, Debt Mutual Funds could be a better option, as they help you achieve your financial goals in a more tax efficient manner and therefore earn better returns.

In terms of operation, Debt funds are not entirely different from other Mutual Fund schemes. However, in terms of safety of capital, they score higher than equity Mutual Funds.

Bonds / NCD’s
Debentures generally have a more specific purpose than other bonds. While both are used to raise capital, debentures typically are issued to raise capital to meet the expenses of an upcoming project or to pay for a planned expansion in business. These debt securities are a common form of long-term financing taken out by corporations.

Debentures carry either a floating or a fixed-interest coupon rate return to investors and will list a repayable date. When the interest payment is due, the company will, most often, pay the interest before they pay shareholder dividends.

The bond is the most common type of debt instrument used by private corporations and by governments. It serves as an IOU between the issuer and an investor. An investor loans a sum of money in return for the promise of repayment at a specified maturity date. Usually, the investor also receives periodic interest payments over the duration of the bonds term.

In a sense, all debentures are bonds, but not all bonds are debentures. Whenever a bond is unsecured, it can be referred to as a debenture.

Structure Products
Apt for high net-worth investors, through Structured Products we offer tailor-made integrated product solutions that can be attuned to the investment profile and risk appetite of our clients thus providing efficient diversification to the investment portfolio.
Essentially, Structure Products aim to enhance the return on investment instrument (say equities, fixed income, etc.) while investing in a complementary instrument (say derivatives, etc.) which balances the risk and acts as a payoff on the returns when the markets take an adverse turn than the view held by the client.
Some of the Structured Products offer principal protection which is to say that they offer full or partial return of the principal invested at maturity. While others offer debt like payoff or even leveraged returns.
Though structured products are prescribed for risk averse investors, it can be a vital component of the portfolio for all kinds of investors to stay ahead of the market dynamics especially during downturns. Thus, structured products:
Enables investors to express very specific market views and monetize the same
In case of capital protection, preserves buying power in market downturns
Are highly customizable, subject to minimum corpus size
Ability to tailor their returns to provide capital growth, income or even a combination of the two

Fixed Maturity Plans
Fixed maturity plans are debt funds that are close-ended, meaning investments can be made only during the time of a new fund offer. It comes with a fixed maturity period and invests across debt instruments like high rated securities and corporate bonds. These are designed to ensure investors get a rate of return that is very much predictable, and at the same time tax-efficient, against the instability of interest rates.
The primary objective of a fixed maturity plan is to generate steady returns over a fixed period. This plan also protects investors from market fluctuations. Fixed maturity plans are not available for subscription continuously therefore, the fund house come up with new fund offer (NFO) for a specific duration. NFO has an opening date and a closing date. You may invest in the NFO only during these days. Upon expiry of the closing date, the offer to invest ceases to exist.

Hybrid Funds
Hybrid schemes, earlier known as Balanced Funds, invest in two or more asset categories so that the investor can avail the benefit of both. There are various types of hybrid funds in the Indian Mutual Fund industry. There are schemes that invest in two assets, viz., equity and debt, or debt and gold. There are also schemes that invest in equity, debt and gold. However, most of the popular hybrid schemes invest in equity and debt assets.

Different types of hybrid funds follow different asset allocation strategies. Remember to have your objectives clear before you invest.