Credit rating: A debt fund invests in different securities according to their credit ratings, i.e., probability of the issuer defaulting in paying the promised rate of interest. A high rating (AAA) means that there is less probability of the issuer defaulting on payment, making the fund less prone to losses.
Duration: Debt funds invest in securities having different maturity periods, such as short, medium or long term, depending on the investment objectives.
Riskometer: Depending upon the credit rating of bonds, SEBI assigns a rating to all debt mutual funds. They are High, Moderately High, Moderate, Moderately Low, and Low respectively.
Returns: Debt funds are relatively safer funds as compared to other funds. Their annual returns usually vary from 6%-10%.