Debt AIFs, a form of Category II, are gaining traction by providing an alternative to traditional fixed deposits or corporate bonds. They typically invest in high-yield debt instruments and corporate loans, offering a fixed, predictable income stream.
The key advantage is their focus on carefully vetted, collateralized loans, which provides a layer of protection and stable returns. For a moderate investor, a debt AIF can be an excellent way to balance out a high-growth equity portfolio with less volatile, income-generating assets.
