Calculating capital gains in a debt mutual fund is not as tricky as it sounds. How?

Debt fund is an investment pool, such as some types of mutual funds or exchange-traded funds, in which the core holding is in fixed income investments like corporate bonds, Treasury bills, government securities, to name a few. When you invest in a debt fund, you give a loan to the issuing entity. One earns through the debt fund in the form of interest and capital appreciation. Debt mutual funds are a useful tool for those who are not willing to take high risks, yet aim for a capital protection. It offers a steady return and there has been a pattern in the past where people are moving to debt mutual funds from fixed deposits for a better return.

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