16 New Debt Mutual Fund Categories Introduced by SEBI

Updated on August 11, 2025 , 4931 views

Securities and Exchange Board of India (SEBI) introduced new and broad categories in Mutual Funds in order to bring uniformity in similar schemes launched by the different Mutual Funds. This is to aim and ensure that investors can find it easier to compare the products and evaluate the different options available before Investing in a scheme.

SEBI intends to make Mutual Fund investment easier for the investors. Investors could invest according to their needs, Financial goals and risk ability. SEBI has circulated new Mutual Fund categorisation on 6th October 2017. This mandates Mutual Fund Houses to categories all their debt schemes (existing & future scheme) into 16 distinct categories. SEBI has also introduced 10 new categories in Equity Mutual Funds.

New Categorisation in Debt Schemes

As per SEBI’s new categorisation, Debt fund schemes will have 16 categories. Here’s the list:

1. Overnight Fund

This debt scheme will invest in overnight securities having a maturity of one day.

2. Liquid Fund

These schemes will invest in debt and money market securities with a maturity of up to 91 days.

3. Ultra Short Duration Fund

This scheme will invest in debt and money Market securities with a Macaulay duration between three to six months. Macaulay duration measures how long it will take the scheme to recoup the investment.

4. Low Duration Fund

The scheme will invest in debt and money market securities with a Macaulay duration between six to 12 months.

5. Money Market Fund

This scheme will invest in money market instruments having a maturity up to one year.

6. Short Duration Fund

This scheme will invest in debt and money market instruments with a Macaulay duration of one to three years.

7. Medium Duration Fund

This scheme will invest in debt and money market instruments with a Macaulay duration of three to four years.

8. Medium to Long Duration Fund

This scheme will invest in debt and money market instruments with a Macaulay duration of four to seven years.

9. Long Duration Fund

This scheme will invest in debt and money market instruments with a Macaulay duration greater than seven years.

10. Dynamic Bond Fund

This is a debt scheme that invests across all the duration.

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11. Corporate Bond Fund

This debt scheme mainly invests in the highest rated corporate Bonds. The fund can invest a minimum 80 percent of its total assets in the highest-rated corporate bonds

12. Credit Risk Fund

This scheme will invest in below the high-rated corporate bonds. The Credit Risk Fund should invest at least 65 percent of its assets below the highest-rated instruments.

13. Banking and PSU Fund

This scheme predominantly invests in debt instruments of Banks, Public Financial Institutional, Public Sector Undertakings.

14. Gilt Fund

This scheme invests in government securities across maturity. Gilt Funds will invest a minimum 80 percent of its total assets in government securities.

15. Gilt Fund with 10-year Constant Duration

This scheme will invest in government securities with a maturity of 10 years. 15. Gilt Fund with 10-year Constant Duration will invest a minimum 80 percent in government securities.

16. Floater Fund

This debt scheme mainly invests in Floating Rate instruments. Floater Fund will invest a minimum of 65 percent of its total assets in floating rate instruments.

Best Debt Mutual Funds to Invest 2025

Fund	NAV	Net Assets (Cr)	3 MO (%)	6 MO (%)	1 YR (%)	3 YR (%)	2024 (%)	Debt Yield (YTM)	Mod. Duration	Eff. Maturity
Axis Credit Risk Fund Growth	₹21.5818 ↓ -0.01	₹367	1.7	4.6	8.5	7.5	8	7.9%	2Y 3M 4D	2Y 9M 11D
PGIM India Credit Risk Fund Growth	₹15.5876 ↑ 0.00	₹39	0.6	4.4	8.4	3		5.01%	6M 14D	7M 2D
HDFC Corporate Bond Fund Growth	₹32.752 ↓ -0.02	₹35,686	1	4.3	8.3	7.7	8.6	6.94%	4Y 3M 14D	6Y 10M 20D
UTI Banking & PSU Debt Fund Growth	₹22.1297 ↓ -0.01	₹805	1.7	4.6	8.3	7.2	7.6	6.53%	1Y 10M 10D	2Y 1M 13D
Aditya Birla Sun Life Corporate Bond Fund Growth	₹113.497 ↓ -0.06	₹28,675	0.9	4.1	8.2	7.7	8.5	6.94%	4Y 5M 26D	6Y 11M 23D
HDFC Banking and PSU Debt Fund Growth	₹23.168 ↓ -0.02	₹6,094	1.2	4.3	8.2	7.4	7.9	6.82%	3Y 8M 23D	5Y 4M 10D
ICICI Prudential Long Term Plan Growth	₹37.0882 ↓ -0.01	₹14,952	0.6	4.1	8.1	7.9	8.2	7.31%	2Y 11M 19D	7Y 7M 6D
Aditya Birla Sun Life Savings Fund Growth	₹553.147 ↑ 0.00	₹20,228	1.9	4	8	7.4	7.9	6.72%	5M 26D	6M 29D
Aditya Birla Sun Life Money Manager Fund Growth	₹373.67 ↑ 0.04	₹29,909	1.8	4.1	8	7.5	7.8	6.67%	6M 25D	6M 25D
UTI Dynamic Bond Fund Growth	₹30.9384 ↓ -0.02	₹473	-0.2	3.6	7.1	7	8.6	6.92%	7Y 2M 12D	15Y 10M 6D
Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 13 Aug 25

Research Highlights & Commentary of 10 Funds showcased

Commentary	Axis Credit Risk Fund	PGIM India Credit Risk Fund	HDFC Corporate Bond Fund	UTI Banking & PSU Debt Fund	Aditya Birla Sun Life Corporate Bond Fund	HDFC Banking and PSU Debt Fund	ICICI Prudential Long Term Plan	Aditya Birla Sun Life Savings Fund	Aditya Birla Sun Life Money Manager Fund	UTI Dynamic Bond Fund
Point 1	Bottom quartile AUM (₹367 Cr).	Bottom quartile AUM (₹39 Cr).	Highest AUM (₹35,686 Cr).	Lower mid AUM (₹805 Cr).	Upper mid AUM (₹28,675 Cr).	Lower mid AUM (₹6,094 Cr).	Upper mid AUM (₹14,952 Cr).	Upper mid AUM (₹20,228 Cr).	Top quartile AUM (₹29,909 Cr).	Bottom quartile AUM (₹473 Cr).
Point 2	Established history (11+ yrs).	Established history (10+ yrs).	Established history (15+ yrs).	Established history (11+ yrs).	Oldest track record among peers (28 yrs).	Established history (11+ yrs).	Established history (15+ yrs).	Established history (22+ yrs).	Established history (19+ yrs).	Established history (15+ yrs).
Point 3	Top rated.	Rating: 5★ (top quartile).	Rating: 5★ (upper mid).	Rating: 5★ (upper mid).	Rating: 5★ (upper mid).	Rating: 5★ (lower mid).	Rating: 5★ (lower mid).	Rating: 5★ (bottom quartile).	Rating: 5★ (bottom quartile).	Rating: 5★ (bottom quartile).
Point 4	Risk profile: Moderate.	Risk profile: Moderate.	Risk profile: Moderately Low.	Risk profile: Moderate.	Risk profile: Moderately Low.	Risk profile: Moderately Low.	Risk profile: Moderate.	Risk profile: Moderately Low.	Risk profile: Low.	Risk profile: Moderate.
Point 5	1Y return: 8.48% (top quartile).	1Y return: 8.43% (top quartile).	1Y return: 8.32% (upper mid).	1Y return: 8.31% (upper mid).	1Y return: 8.20% (upper mid).	1Y return: 8.19% (lower mid).	1Y return: 8.06% (lower mid).	1Y return: 8.00% (bottom quartile).	1Y return: 7.95% (bottom quartile).	1Y return: 7.10% (bottom quartile).
Point 6	1M return: 0.29% (upper mid).	1M return: 0.27% (upper mid).	1M return: -0.04% (lower mid).	1M return: 0.27% (upper mid).	1M return: -0.12% (bottom quartile).	1M return: 0.03% (lower mid).	1M return: -0.26% (bottom quartile).	1M return: 0.49% (top quartile).	1M return: 0.49% (top quartile).	1M return: -0.74% (bottom quartile).
Point 7	Sharpe: 2.51 (upper mid).	Sharpe: 1.73 (upper mid).	Sharpe: 1.57 (bottom quartile).	Sharpe: 2.05 (upper mid).	Sharpe: 1.66 (lower mid).	Sharpe: 1.45 (bottom quartile).	Sharpe: 1.66 (lower mid).	Sharpe: 3.55 (top quartile).	Sharpe: 3.32 (top quartile).	Sharpe: 0.90 (bottom quartile).
Point 8	Information ratio: 0.00 (top quartile).	Information ratio: 0.00 (top quartile).	Information ratio: 0.00 (upper mid).	Information ratio: 0.00 (upper mid).	Information ratio: 0.00 (upper mid).	Information ratio: 0.00 (lower mid).	Information ratio: 0.00 (lower mid).	Information ratio: 0.00 (bottom quartile).	Information ratio: 0.00 (bottom quartile).	Information ratio: 0.00 (bottom quartile).
Point 9	Yield to maturity (debt): 7.90% (top quartile).	Yield to maturity (debt): 5.01% (bottom quartile).	Yield to maturity (debt): 6.94% (upper mid).	Yield to maturity (debt): 6.53% (bottom quartile).	Yield to maturity (debt): 6.94% (upper mid).	Yield to maturity (debt): 6.82% (lower mid).	Yield to maturity (debt): 7.31% (top quartile).	Yield to maturity (debt): 6.72% (lower mid).	Yield to maturity (debt): 6.67% (bottom quartile).	Yield to maturity (debt): 6.92% (upper mid).
Point 10	Modified duration: 2.26 yrs (upper mid).	Modified duration: 0.54 yrs (top quartile).	Modified duration: 4.29 yrs (bottom quartile).	Modified duration: 1.86 yrs (upper mid).	Modified duration: 4.49 yrs (bottom quartile).	Modified duration: 3.73 yrs (lower mid).	Modified duration: 2.97 yrs (lower mid).	Modified duration: 0.49 yrs (top quartile).	Modified duration: 0.57 yrs (upper mid).	Modified duration: 7.20 yrs (bottom quartile).

Axis Credit Risk Fund

Bottom quartile AUM (₹367 Cr).
Established history (11+ yrs).
Top rated.
Risk profile: Moderate.
1Y return: 8.48% (top quartile).
1M return: 0.29% (upper mid).
Sharpe: 2.51 (upper mid).
Information ratio: 0.00 (top quartile).
Yield to maturity (debt): 7.90% (top quartile).
Modified duration: 2.26 yrs (upper mid).

PGIM India Credit Risk Fund

Bottom quartile AUM (₹39 Cr).
Established history (10+ yrs).
Rating: 5★ (top quartile).
Risk profile: Moderate.
1Y return: 8.43% (top quartile).
1M return: 0.27% (upper mid).
Sharpe: 1.73 (upper mid).
Information ratio: 0.00 (top quartile).
Yield to maturity (debt): 5.01% (bottom quartile).
Modified duration: 0.54 yrs (top quartile).

HDFC Corporate Bond Fund

Highest AUM (₹35,686 Cr).
Established history (15+ yrs).
Rating: 5★ (upper mid).
Risk profile: Moderately Low.
1Y return: 8.32% (upper mid).
1M return: -0.04% (lower mid).
Sharpe: 1.57 (bottom quartile).
Information ratio: 0.00 (upper mid).
Yield to maturity (debt): 6.94% (upper mid).
Modified duration: 4.29 yrs (bottom quartile).

UTI Banking & PSU Debt Fund

Lower mid AUM (₹805 Cr).
Established history (11+ yrs).
Rating: 5★ (upper mid).
Risk profile: Moderate.
1Y return: 8.31% (upper mid).
1M return: 0.27% (upper mid).
Sharpe: 2.05 (upper mid).
Information ratio: 0.00 (upper mid).
Yield to maturity (debt): 6.53% (bottom quartile).
Modified duration: 1.86 yrs (upper mid).

Aditya Birla Sun Life Corporate Bond Fund

Upper mid AUM (₹28,675 Cr).
Oldest track record among peers (28 yrs).
Rating: 5★ (upper mid).
Risk profile: Moderately Low.
1Y return: 8.20% (upper mid).
1M return: -0.12% (bottom quartile).
Sharpe: 1.66 (lower mid).
Information ratio: 0.00 (upper mid).
Yield to maturity (debt): 6.94% (upper mid).
Modified duration: 4.49 yrs (bottom quartile).

HDFC Banking and PSU Debt Fund

Lower mid AUM (₹6,094 Cr).
Established history (11+ yrs).
Rating: 5★ (lower mid).
Risk profile: Moderately Low.
1Y return: 8.19% (lower mid).
1M return: 0.03% (lower mid).
Sharpe: 1.45 (bottom quartile).
Information ratio: 0.00 (lower mid).
Yield to maturity (debt): 6.82% (lower mid).
Modified duration: 3.73 yrs (lower mid).

ICICI Prudential Long Term Plan

Upper mid AUM (₹14,952 Cr).
Established history (15+ yrs).
Rating: 5★ (lower mid).
Risk profile: Moderate.
1Y return: 8.06% (lower mid).
1M return: -0.26% (bottom quartile).
Sharpe: 1.66 (lower mid).
Information ratio: 0.00 (lower mid).
Yield to maturity (debt): 7.31% (top quartile).
Modified duration: 2.97 yrs (lower mid).

Aditya Birla Sun Life Savings Fund

Upper mid AUM (₹20,228 Cr).
Established history (22+ yrs).
Rating: 5★ (bottom quartile).
Risk profile: Moderately Low.
1Y return: 8.00% (bottom quartile).
1M return: 0.49% (top quartile).
Sharpe: 3.55 (top quartile).
Information ratio: 0.00 (bottom quartile).
Yield to maturity (debt): 6.72% (lower mid).
Modified duration: 0.49 yrs (top quartile).

Aditya Birla Sun Life Money Manager Fund

Top quartile AUM (₹29,909 Cr).
Established history (19+ yrs).
Rating: 5★ (bottom quartile).
Risk profile: Low.
1Y return: 7.95% (bottom quartile).
1M return: 0.49% (top quartile).
Sharpe: 3.32 (top quartile).
Information ratio: 0.00 (bottom quartile).
Yield to maturity (debt): 6.67% (bottom quartile).
Modified duration: 0.57 yrs (upper mid).

UTI Dynamic Bond Fund

Bottom quartile AUM (₹473 Cr).
Established history (15+ yrs).
Rating: 5★ (bottom quartile).
Risk profile: Moderate.
1Y return: 7.10% (bottom quartile).
1M return: -0.74% (bottom quartile).
Sharpe: 0.90 (bottom quartile).
Information ratio: 0.00 (bottom quartile).
Yield to maturity (debt): 6.92% (upper mid).
Modified duration: 7.20 yrs (bottom quartile).

Disclaimer:
All efforts have been made to ensure the information provided here is accurate. However, no guarantees are made regarding correctness of data. Please verify with scheme information document before making any investment.