Best corporate bond mutual funds to invest

Are you planning to invest in relatively-safe debt schemes to take care of your near-term goals?

These schemes invest at least 80% of their corpus in the papers of the highest-rated companies. This makes them relatively safer than other debt schemes such as credit risk funds. They are also safer than gilt funds and long term debt funds that are highly sensitive to interest rate changes in the economy.

How Are Returns Calculated for Mutual Funds?

Investors typically earn a return from a mutual fund in three ways:

1. Income is earned from dividends on stocks and interest on bonds held in the fund's portfolio, and it pays out nearly all of the income it receives over the year to fund owners in the form of a distribution. Funds often give investors a choice either to receive a check for distributions or to reinvest the earnings to purchase additional shares of the mutual fund.

2. Portfolio Distributions:If the fund sells securities that have increased in price, the fund realizes a capital gain, which most funds also pass on to investors in a distribution.