A debt fund is a type of mutual fund or exchange-traded fund that invests in fixed income instruments such as corporate and government bonds, corporate debt securities, and money market instruments. Debt funds are also known as fixed income funds or bond funds. Here are some key points about debt funds:

• Debt funds are considered to be less risky than equity investments, and are ideal for investors who aim for regular income but are risk-averse.
• Debt funds are less volatile and offer relatively stable returns, making them a good option for investors who are looking for steady returns with low volatility.
• Debt funds are highly recommended to investors with lower risk tolerance, and usually diversify across various securities to ensure stable returns.
• Debt funds can be classified by their primary underlying assets, such as short-term or long-term bonds, securitized products, money market instruments, or floating rate debt.
• Debt funds may also be classified by factors such as type of yield (high income) or term (short, medium, long) or some other specialty such as zero-coupon bonds, international bonds, multisector bonds, or convertible bonds.
• Debt funds are less expensive than equity funds because their management costs are inherently lower.
• Debt funds offer lower returns as compared to equity funds, and there is no guarantee of the returns.
• The NAV of debt funds fluctuates with changes in the interest rate. If the interest rates rise, then the NAV of a debt fund falls and vice-versa.

In summary, debt funds are a type of mutual fund or exchange-traded fund that invests in fixed income instruments, and are ideal for investors who aim for regular income but are risk-averse. They are less volatile and offer relatively stable returns, making them a good option for investors who are looking for steady returns with low volatility.