Credit Risk: The risk of a bond issuer defaulting on their payment obligations.
Interest Rate Risk: The risk of losing value in bonds when interest rates rise, as bond prices and interest rates are inversely related.
Liquidity Risk: The risk of not being able to easily sell the bond at a fair price.

When interest rates rise, bond prices typically fall, and vice versa. Funds holding longer maturity bonds are more sensitive to rate changes.

Yes, while they are considered safer than equity funds, there is a risk of loss if interest rates rise sharply or if a bond issuer defaults.

Distribution frequency can vary; some funds offer monthly, quarterly, or annual dividends, while others may not distribute regular dividends at all.

Liquid funds invest in securities with maturities up to 91 days, focusing on high liquidity and lower risk. Ultra-short-term funds invest in slightly longer maturities, typically up to one year, offering potentially higher yields with a slightly higher risk profile.

Yes, they can be a part of a retirement portfolio, providing stability and income, especially suitable for conservative investors or those nearing retirement.

Look at the fund’s past returns, its consistency over various market conditions, the credit quality of its holdings, and compare its performance with benchmarks and peer funds.

Beginners should consider funds with a good track record, low expense ratios, and those that invest in high-quality debt instruments, such as government securities and top-rated corporate bonds.

Expense ratios represent the annual fees charged by funds to manage your investments. A higher expense ratio can significantly reduce the net returns, especially in a low-interest environment.

Gilt funds invest exclusively in government securities, which are considered risk-free in terms of credit risk. They are suitable for conservative investors who want safety and are willing to accept fluctuations due to changes in interest rates.