HDFC Floating Rate Fund

Featured Product Series

Presenting another exciting Investment option as a part of our #FeatureFriday Series.

A debt fund that invests in floating rate instruments. What’s a Floating Rate Instrument? if someone issues a fixed-rate instrument (Bond, Debentures) with a 4% interest rate, the individual will pay that rate for the lifetime of the loan, and the payments will be the same throughout the loan term.

In contrast, if a borrower/issuer issues an instrument with a variable rate (Floating rate), it may start with a 4% rate and then adjust, either up or down, changing the monthly payments depending on the market conditions. This strategy works best in a rising interest rate environment where the yields of the respective bonds increase over the tenure of the bond.

Intelligent Investor Notes

• Works best in a rising interest rate environment
• Consistent performance than most funds of its category
• Credit profile indicates it has lent to quality borrowers

Not sure if this product is for you? Here’s a quick checklist.

• Looking for risk-managed debt yields in a rising interest rate scenario
• Prefer an alternative to FDs (low yields) or Govt Bonds (liquidity low)
• Prefer stability and low risk for a part of your portfolio

Disclaimer: Views expressed are for informational purposes only and do not constitute any Financial Advice whatsoever. Please consult a financial advisor and read offer documents carefully before investing.