As the name suggests, an overnight fund is a fund that invests predominantly in overnight securities having a maturity of one day. Overnight mutual fund schemes are favoured investment categories amongst debt funds for the investors seeking a very short-term parking of surplus funds.
Let’s learn more about the salient features of overnight funds.
A Corporate Bond Fund is an open-ended debt scheme predominantly investing in AA+ and above rated corporate bonds. These funds are mandated by SEBI to invest a minimum of 80% of total assets in AA+ and above rated corporate bonds. To further clarify, corporate Bonds are one of the predominant sources of funds for the companies willing to borrow from the market, apart from the borrowings from banks and financial institutions.
Debt funds provide an excellent alternate investment option for investors for traditional investment products. The debt funds may be categorised based on their investment strategies and/or the issuer companies wherein such funds are invested.
