Neutral impactSector
Debt funds or direct bonds? Understanding the routes to fixed income investing
Mint 23 hrs ago·28 Jul 2026, 7:31 am
Sebi's recent regulatory changes have significantly lowered the entry barrier for individual investors to buy government and corporate bonds directly. This shift is making the fixed-income market more transparent and accessible, allowing investors to bypass mutual funds and hold assets directly. However, this move introduces a new layer of complexity, as direct bond investing requires active management and carries specific risks that differ from traditional debt funds.
For retail investors, the choice between the two depends on their appetite for effort and risk. Direct bonds offer the potential for higher returns and complete control over the portfolio, but they demand time and expertise to manage. In contrast, debt mutual funds provide instant diversification and professional management, making them a convenient option for those seeking a hands-off approach to fixed income.
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