An open-ended debt scheme predominantly investing in debt instruments of banks, Public Sector Undertakings, Public Financial Institutions and Municipal Bonds. The minimum investment in such instruments should be 80 percent of total assets.2 pointsa) Banking and PSU fundb) Blue chip fundc) Mid cap fundd) Small cap fund
Question
An open-ended debt scheme predominantly investing in debt instruments of banks, Public Sector Undertakings, Public Financial Institutions and Municipal Bonds. The minimum investment in such instruments should be 80 percent of total assets.2 pointsa) Banking and PSU fundb) Blue chip fundc) Mid cap fundd) Small cap fund
Solution
The answer is a) Banking and PSU fund. This type of fund primarily invests in debt instruments of banks, Public Sector Undertakings (PSUs), Public Financial Institutions, and Municipal Bonds. As per the description, at least 80% of the total assets should be invested in such instruments. Blue chip funds, mid cap funds, and small cap funds are types of equity funds and they primarily invest in stocks of companies, not debt instruments.
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