Getty Images1. Overnight funds are open-ended debt mutual fund schemes that invest in overnight securities with a maturity of one day.
2. The fund manager has to buy new securities on a daily basis as securities mature every day.
3. Since they have a very short investment horizon, these schemes are not impacted by interest rate changes and defaults in securities.
4. Overnight funds are supposed to be the safest among the debt mutual fund categories.
5. As they have the lowest risk among all MFs, they also give the lowest returns.
(Content on this page is courtesy Centre for Investment Education and Learning (CIEL). Contributions by Girija Gadre, Arti Bhargava and Labdhi Mehta.)
2. The fund manager has to buy new securities on a daily basis as securities mature every day.
3. Since they have a very short investment horizon, these schemes are not impacted by interest rate changes and defaults in securities.
4. Overnight funds are supposed to be the safest among the debt mutual fund categories.
5. As they have the lowest risk among all MFs, they also give the lowest returns.
(Content on this page is courtesy Centre for Investment Education and Learning (CIEL). Contributions by Girija Gadre, Arti Bhargava and Labdhi Mehta.)
(Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com.)
(Your legal guide on estate planning, inheritance, will and more.)
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