Floater funds (direct plans) have fetched investors a category average return of 7.8 per cent over the past year. Basing investment decisions solely on past performance could prove counter-productive in this category.
How do they work?
The Securities and Exchange Board of India (Sebi) guidelines mandate that floater funds must invest a minimum of 65 per cent of total assets in floating-rate instruments. These could be natural or synthetic.
