OLD-SBI Magnum Income Fund - Regular - Dividend

What are floating rate mutual fund?

A Floating Rate Mutual Fund in India is a type of mutual fund scheme that invests predominantly in debt securities or bonds whose interest rate is not fixed but changes according to the prevailing market rates.

In a floating rate mutual fund, the fund manager invests in debt securities that have a floating interest rate, which means that the interest rate on these securities is reset periodically (usually every 3 to 6 months) based on a benchmark rate such as the MIBOR or the MIFOR.

As the interest rates change, the return on the fund changes as well. When interest rates go up, the returns on the fund increase, and when interest rates go down, the returns on the fund decrease.

Floating rate mutual funds are considered to be less risky than other types of debt mutual funds because they offer a certain degree of protection against interest rate risks. These funds are suitable for investors who are looking for a regular income with a low risk profile.