Debt funds are often described as the "safe" part of a portfolio. That description hides the fact that debt schemes differ from one another far more than most investors expect.
Three levers that decide behaviour
Duration. Sensitivity to interest rate movements. Credit quality. The risk of default. Liquidity. How readily instruments can be sold in stressed markets.
Where debt typically fits
Money needed within a short and known period, or the stabilising portion of a portfolio otherwise weighted towards equity.
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