For Gurgaon-based Rohit Seth, 2016 was a year when he changed his faith as an investor. From being a hard-core investor in fixed deposits and public provident fund, he moved to a debt-equity allocation of 70:30. And he hasn’t been disappointed. His debt funds are earning 12-14 per cent, against the 8-8.5 per cent returns from fixed deposits. And he is wiser as well. “I do understand that debt funds can be uncertain. But I am invested for a minimum of five to six years and in that period, the returns will not be negative. I also don’t invest the money in one go. I invest through Systematic Transfer Plans (STP) and Systematic Investment Plans (SIP),” he says.
Amit Kukreja, Founder, WealthBeing Advisors, is Seth’s advisor. And he has a sound advice for investors looking at debt funds. “Debt funds are not guaranteed-return products. There are times that they can give lower returns than a fixed deposit. However, the possibility varies based on macro-economic conditions, credit risk and interest rate scenarios.”
