Debti Management

Presented by -
MFM 01 - Bhakti Anbhavane MFM 07 - Namrata Kadam

MFM 13 - Swati Pawar MFM 21 - Nilesh Soni
DEBT
 Debt is an amount of money borrowed by one party from
another.
 Debt instruments indicating that company has borrowed
certain sum of money and promise to repay it in future under
clearly defined terms.
 Debt consists of term loan, debentures, commercial
papers, over draft, public deposits, corporate deposits,
discounting.
OBJECTIVES
In India, most government debt is held in long-term interest
bearing securities such as national savings certificates, rural
development bonds, capital development bonds, etc. In
industrially advanced countries like the U.S.A., the term
government or public debt refers to the accumulated amount
of what government has borrowed to finance past deficits.
How do Debt Funds work?
1. Every debt security has a credit rating which allows investors
to understand the possibility of default by the debt issuer in
disbursing the principal and interest.
2. Debt fund managers use these ratings to select high-quality
debt instruments.
3. A higher rating implies that the issuer is less likely to default.
Who Should Invest In Debt
Mutual Funds?
 Highly recommended to investors with lower risk tolerance.
 Diversify across various securities to ensure stable returns.
 Returns are in an expected range.
Debt Funds Are Also Available For
1. Short-term investors (3-12 months)

2. Medium-term investors (3-5 years)
TYPES OF DEBT FUNDS
Liquid Fund Overnight Fund

Money Market Fund Banking and PSU Fund
Dynamic Bond Fund Credit Risk Fund
Corporate Bond Fund Floater Fund
Risks In Debt Funds
 Credit Risk – which is the default risk of the issuer not
repaying the principal and interest.
 Interest Rate Risk – which is the effect of changing interest

rates on the value of the scheme’s securities.
 Liquidity Risk – which is the risk carried by the fund house

of not having adequate liquidity to meet redemption requests.
XYZ MEDIUM TERM
DEBT FUND
Objective of scheme
To generate income / capital appreciation through investments in Debt
and Money Market Instruments.
Fund manager
Bhakti Anbhavane Namrata Kadam
Swati Pawar Nilesh Soni
Assets Under Management- 100cr.
Expense ratio – 0.49%
Benchmark - CRISIL 10 Year Gilt Index
Type : Open Ended Fund. You can invest any time in this
fund.
Minimum investment amount- 300

Lumpsum investment amount-5000
Exit load – 0%
Types of holding
SECURITY TYPE % Weight
GOI 21.38%
CP 1.10%
NCD and bonds 73.92%
PTC 1.03%
REVERSE REPO 1.44%
TREPS 1.13%
Sector Rating Agency Rating Sum of Value (Mn) Sum of % of Total Holding
Banks BRICKWORK BWR AA 733.55 0.02
Banks CRISIL AA 392.41 0.01
Banks CRISIL AA- 250.62 0.01
Construction civil CRISIL AAA 253.06 0.01
Copper & copper products CRISIL AA- 820.06 0.03

Engineering, designing, construction FITCH AA 560.39 0.02
Financial institution CARE CARE AAA 245.9 0.01
Financial institution CRISIL AAA 4310.03 0.14
Financial institution ICRA LAA- 259.08 0.01

Financial institution ICRA LAAA 1142.27 0.04
Gas transmission/marketing CRISIL AAA 484.31 0.02
Housing finance CRISIL AA 9.87 0.00
Housing finance CRISIL AAA 1516.13 0.05

Nbfc CARE CARE AA- 396.22 0.01
Nbfc CRISIL AA 706.94 0.02
Nbfc CRISIL AA- 1667.63 0.06
Nbfc CRISIL AA+ 611.5 0.02
Nbfc CRISIL AAA 10.42 0.00
Nbfc CRISIL P1+ 335.23 0.01
Other (blank) (blank) 5873.66 0.21
Passenger/utility vehicles CRISIL AA- 100.61 0.00
Port CRISIL AAA 581.48 0.02
Power CARE CARE AA 574.37 0.02
Power CRISIL AA 1641.4 0.05
Power CRISIL AA- 64.98 0.00
Power CRISIL AAA 751.96 0.02
Power ICRA LAAA 252.99 0.01
Power equipment CRISIL AA 497.56 0.02
Ptc CRISIL AA 311.93 0.01
CARE
Refineries/marketing CARE AAA 247.42 0.01
Refineries/marketing CRISIL AAA 414.6 0.01
Residential/commercial/sez project CARE CARE AA 389.87 0.01
Residential/commercial/sez project CARE CARE AA- 159.28 0.01
Residential/commercial/sez project CRISIL AAA 1501.14 0.05
Steel CARE CARE AA- 128.88 0.00
Telecom - services CRISIL AA 490.81 0.02
Trading CARE CARE A 251.63 0.01
Grand Total 28940.19 0.97

Conclusion
This is a low-risk mutual funds which invest most of their money
into fixed income instruments like corporate bonds, government
bonds (both state and central), bonds issued by banks, Comercial
paper, non convertible debentures, reveres repo etc. Debt funds are
preferred by individuals who are not willing to invest in the highly
volatile equity markets.
Debt funds are better suited for investors having short to medium-
term financial needs.

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Presented by -

MFM 01 - Bhakti Anbhavane MFM 07 - Namrata Kadam

Debt Funds Are Also Available For

1. Short-term investors (3-12 months)

Liquid Fund Overnight Fund

 Interest Rate Risk – which is the effect of changing interest

 Liquidity Risk – which is the risk carried by the fund house

Benchmark - CRISIL 10 Year Gilt Index

Minimum investment amount- 300

NCD and bonds 73.92%

REVERSE REPO 1.44%

Copper & copper products CRISIL AA- 820.06 0.03

Financial institution ICRA LAA- 259.08 0.01

Housing finance CRISIL AAA 1516.13 0.05

Refineries/marketing CRISIL AAA 414.6 0.01

Residential/commercial/sez project CARE CARE AA 389.87 0.01

Residential/commercial/sez project CARE CARE AA- 159.28 0.01

Residential/commercial/sez project CRISIL AAA 1501.14 0.05

Steel CARE CARE AA- 128.88 0.00

Telecom - services CRISIL AA 490.81 0.02

Trading CARE CARE A 251.63 0.01

Grand Total 28940.19 0.97

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