Best Debt Mutual Funds in India 2026

Updated on August 27, 2026 , 66007 views

Looking for a debt mutual fund to invest in? Choosing the right one can be easier when you know what to look for. Whether you want to park your money for a few months, plan for a short-term goal or add stability to your Portfolio, there are different types of debt funds to consider.

In this guide, we have shortlisted the top debt Mutual Funds across categories and explained what makes each category different, the risks involved and the key factors to check before Investing.

Quick Summary

For very short-term needs: Overnight and Liquid Funds
For a few months: Ultra Short Duration and Money market funds
For 1–3 years: Short Duration, Corporate Bond and Banking & PSU Debt Funds
For longer horizons: Dynamic Bond and Gilt Funds
Key risks: Interest Rate Risk, Credit Risk and Liquidity Risk
Before investing: Check the fund’s duration, credit quality, YTM, expense ratio and portfolio

The sections below explain these debt fund categories and the top funds to consider in each category.

Why Invest in Debt Mutual Funds?

Debt mutual funds can be useful for investors looking for an alternative to equity investments for short- or medium-term goals, portfolio diversification or managing surplus money.

Here are some of the key reasons investors consider debt funds:

Lower Volatility than equity funds: Debt funds generally experience lower price fluctuations than Equity Funds, although their NAV can still rise or fall.
Options for different investment horizons: From overnight and liquid funds for short-term needs to short-duration, corporate bond and gilt funds for longer horizons, investors can choose a category based on their time frame and risk appetite.
Liquidity: Most open-ended debt funds allow investors to redeem their units when required, subject to the scheme's terms and applicable exit load.
Portfolio diversification: Adding debt funds to a portfolio can help diversify investments across different asset classes.
Flexible withdrawals: Investors can use a Systematic Withdrawal Plan (SWP) to withdraw a chosen amount at regular intervals. However, an SWP is a withdrawal facility and does not guarantee a fixed return or income.

Key Benefits of Debt Funds

Options across different investment horizons
Generally lower volatility than equity funds
Access to government securities, corporate Bonds and money market instruments
Liquidity in most open-ended schemes
Flexible investment and withdrawal options
Potential to diversify an investment portfolio

Note: Debt mutual funds are not risk-free. Returns are market-linked and can be affected by interest-rate movements, credit quality and liquidity conditions.

Risks in Debt Mutual Funds

Debt mutual funds are generally considered less volatile than equity funds, but they are not risk-free. The value of a debt fund can fluctuate depending on the securities in its portfolio and market conditions.

The key risks to understand are:

1. Credit Risk

Credit risk is the possibility that an issuer may delay or fail to pay interest or repay the principal on a debt security. Funds with higher exposure to lower-rated securities may carry greater credit risk.

A higher credit rating can indicate stronger credit quality, but it does not guarantee that an issuer will never default.

2. Interest Rate Risk

Bond prices and interest rates generally move in opposite directions. When interest rates rise, existing bond prices can fall, which can affect the NAV of a debt fund.

Funds with longer portfolio duration are generally more sensitive to interest-rate movements than shorter-duration funds.

3. Liquidity Risk

Liquidity risk arises when the underlying securities cannot be bought or sold easily at a reasonable price. This can become more important during periods of market stress.

4. Concentration Risk

A fund with a large exposure to a particular issuer, sector or group may be more affected if that issuer or sector faces financial difficulties.

Therefore, investors should look beyond the fund's returns and check how its portfolio is constructed.

Remember: A debt fund's risk depends on its category and underlying portfolio. Before investing, consider the fund's credit quality, duration, portfolio concentration and your investment horizon.

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Top Debt Mutual Funds by Category

Debt mutual funds are divided into different categories based on their investment strategy, portfolio duration and the type of securities they invest in. Below, we have listed the top funds across each debt fund category to help you compare your options.

Fund Selection Methodology used to find 5 funds

Category: Debt
Sub-category: Liquid%20Fund
AUM Range: 10000 to 100000 Cr
Sorted On : drat (high to low)
Tags: fcpro
No Of Funds: 5

Top Overnight Funds

Overnight Funds invest in securities with a maturity of one day. They are generally considered for very short-term parking of money.

Fund	NAV	Net Assets (Cr)	Min Investment	1 MO (%)	3 MO (%)	6 MO (%)	1 YR (%)	2025 (%)	Debt Yield (YTM)	Mod. Duration	Eff. Maturity
UTI Overnight Fund Growth	₹3,722.22 ↑ 0.51	₹5,089	1,000	0.4	1.3	2.5	5.3	5.8	5.41%	2D	2D
SBI Overnight Fund Growth	₹4,410.85 ↑ 0.60	₹29,876	5,000	0.4	1.3	2.5	5.2	5.7	5.39%	1D	1D
HDFC Overnight Fund Growth	₹4,033.42 ↑ 0.54	₹11,145	5,000	0.4	1.3	2.5	5.2	5.7	5.6%	2D	2D
Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 28 Aug 26

Research Highlights & Commentary of 3 Funds showcased

Commentary	UTI Overnight Fund	SBI Overnight Fund	HDFC Overnight Fund
Point 1	Bottom quartile AUM (₹5,089 Cr).	Highest AUM (₹29,876 Cr).	Lower mid AUM (₹11,145 Cr).
Point 2	Established history (22+ yrs).	Established history (23+ yrs).	Oldest track record among peers (24 yrs).
Point 3	Top rated.	Rating: 2★ (lower mid).	Rating: 1★ (bottom quartile).
Point 4	Risk profile: Moderately Low.	Risk profile: Low.	Risk profile: Low.
Point 5	1Y return: 5.25% (upper mid).	1Y return: 5.21% (lower mid).	1Y return: 5.17% (bottom quartile).
Point 6	1M return: 0.42% (upper mid).	1M return: 0.42% (lower mid).	1M return: 0.42% (bottom quartile).
Point 7	Sharpe: -15.39 (upper mid).	Sharpe: -17.50 (lower mid).	Sharpe: -19.68 (bottom quartile).
Point 8	Information ratio: 0.00 (upper mid).	Information ratio: 0.00 (lower mid).	Information ratio: 0.00 (bottom quartile).
Point 9	Yield to maturity (debt): 5.41% (lower mid).	Yield to maturity (debt): 5.39% (bottom quartile).	Yield to maturity (debt): 5.60% (upper mid).
Point 10	Modified duration: 0.01 yrs (lower mid).	Modified duration: 0.00 yrs (upper mid).	Modified duration: 0.01 yrs (bottom quartile).

UTI Overnight Fund

Bottom quartile AUM (₹5,089 Cr).
Established history (22+ yrs).
Top rated.
Risk profile: Moderately Low.
1Y return: 5.25% (upper mid).
1M return: 0.42% (upper mid).
Sharpe: -15.39 (upper mid).
Information ratio: 0.00 (upper mid).
Yield to maturity (debt): 5.41% (lower mid).
Modified duration: 0.01 yrs (lower mid).

SBI Overnight Fund

Highest AUM (₹29,876 Cr).
Established history (23+ yrs).
Rating: 2★ (lower mid).
Risk profile: Low.
1Y return: 5.21% (lower mid).
1M return: 0.42% (lower mid).
Sharpe: -17.50 (lower mid).
Information ratio: 0.00 (lower mid).
Yield to maturity (debt): 5.39% (bottom quartile).
Modified duration: 0.00 yrs (upper mid).

HDFC Overnight Fund

Lower mid AUM (₹11,145 Cr).
Oldest track record among peers (24 yrs).
Rating: 1★ (bottom quartile).
Risk profile: Low.
1Y return: 5.17% (bottom quartile).
1M return: 0.42% (bottom quartile).
Sharpe: -19.68 (bottom quartile).
Information ratio: 0.00 (bottom quartile).
Yield to maturity (debt): 5.60% (upper mid).
Modified duration: 0.01 yrs (bottom quartile).

Top Liquid Funds

Liquid Funds invest in short-term debt and money market securities. They are generally considered for investors looking to park money for a short period while retaining liquidity.

Fund	NAV	Net Assets (Cr)	Min Investment	1 MO (%)	3 MO (%)	6 MO (%)	1 YR (%)	2025 (%)	Debt Yield (YTM)	Mod. Duration	Eff. Maturity
Axis Liquid Fund Growth	₹3,122.99 ↑ 0.60	₹56,438	500	0.5	1.7	3.4	6.4	6.6	6.47%	2M 5D	2M 5D
Aditya Birla Sun Life Liquid Fund Growth	₹451.73 ↑ 0.07	₹68,800	5,000	0.5	1.7	3.3	6.4	6.5	6.49%	2M 5D	2M 5D
Invesco India Liquid Fund Growth	₹3,852.99 ↑ 0.69	₹20,723	5,000	0.5	1.7	3.3	6.4	6.5	6.32%	1M 11D	1M 11D
Nippon India Liquid Fund Growth	₹6,839.54 ↑ 1.19	₹41,346	100	0.5	1.7	3.3	6.4	6.5	6.5%	2M	2M 4D
Tata Liquid Fund Growth	₹4,413.79 ↑ 0.79	₹27,603	5,000	0.5	1.7	3.3	6.4	6.5	6.44%	2M 11D	2M 11D
Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 28 Aug 26

Research Highlights & Commentary of 5 Funds showcased

Commentary	Axis Liquid Fund	Aditya Birla Sun Life Liquid Fund	Invesco India Liquid Fund	Nippon India Liquid Fund	Tata Liquid Fund
Point 1	Upper mid AUM (₹56,438 Cr).	Highest AUM (₹68,800 Cr).	Bottom quartile AUM (₹20,723 Cr).	Lower mid AUM (₹41,346 Cr).	Bottom quartile AUM (₹27,603 Cr).
Point 2	Established history (16+ yrs).	Oldest track record among peers (22 yrs).	Established history (19+ yrs).	Established history (22+ yrs).	Established history (22+ yrs).
Point 3	Top rated.	Rating: 4★ (upper mid).	Rating: 4★ (lower mid).	Rating: 4★ (bottom quartile).	Rating: 4★ (bottom quartile).
Point 4	Risk profile: Low.	Risk profile: Low.	Risk profile: Low.	Risk profile: Low.	Risk profile: Low.
Point 5	1Y return: 6.44% (top quartile).	1Y return: 6.39% (upper mid).	1Y return: 6.38% (lower mid).	1Y return: 6.36% (bottom quartile).	1Y return: 6.35% (bottom quartile).
Point 6	1M return: 0.55% (top quartile).	1M return: 0.54% (bottom quartile).	1M return: 0.54% (lower mid).	1M return: 0.54% (bottom quartile).	1M return: 0.54% (upper mid).
Point 7	Sharpe: 2.57 (top quartile).	Sharpe: 2.40 (bottom quartile).	Sharpe: 2.42 (lower mid).	Sharpe: 2.29 (bottom quartile).	Sharpe: 2.49 (upper mid).
Point 8	Information ratio: 0.00 (top quartile).	Information ratio: 0.00 (upper mid).	Information ratio: 0.00 (lower mid).	Information ratio: 0.00 (bottom quartile).	Information ratio: 0.00 (bottom quartile).
Point 9	Yield to maturity (debt): 6.47% (lower mid).	Yield to maturity (debt): 6.49% (upper mid).	Yield to maturity (debt): 6.32% (bottom quartile).	Yield to maturity (debt): 6.50% (top quartile).	Yield to maturity (debt): 6.44% (bottom quartile).
Point 10	Modified duration: 0.18 yrs (bottom quartile).	Modified duration: 0.18 yrs (lower mid).	Modified duration: 0.12 yrs (top quartile).	Modified duration: 0.17 yrs (upper mid).	Modified duration: 0.20 yrs (bottom quartile).

Axis Liquid Fund

Upper mid AUM (₹56,438 Cr).
Established history (16+ yrs).
Top rated.
Risk profile: Low.
1Y return: 6.44% (top quartile).
1M return: 0.55% (top quartile).
Sharpe: 2.57 (top quartile).
Information ratio: 0.00 (top quartile).
Yield to maturity (debt): 6.47% (lower mid).
Modified duration: 0.18 yrs (bottom quartile).

Aditya Birla Sun Life Liquid Fund

Highest AUM (₹68,800 Cr).
Oldest track record among peers (22 yrs).
Rating: 4★ (upper mid).
Risk profile: Low.
1Y return: 6.39% (upper mid).
1M return: 0.54% (bottom quartile).
Sharpe: 2.40 (bottom quartile).
Information ratio: 0.00 (upper mid).
Yield to maturity (debt): 6.49% (upper mid).
Modified duration: 0.18 yrs (lower mid).

Invesco India Liquid Fund

Bottom quartile AUM (₹20,723 Cr).
Established history (19+ yrs).
Rating: 4★ (lower mid).
Risk profile: Low.
1Y return: 6.38% (lower mid).
1M return: 0.54% (lower mid).
Sharpe: 2.42 (lower mid).
Information ratio: 0.00 (lower mid).
Yield to maturity (debt): 6.32% (bottom quartile).
Modified duration: 0.12 yrs (top quartile).

Nippon India Liquid Fund

Lower mid AUM (₹41,346 Cr).
Established history (22+ yrs).
Rating: 4★ (bottom quartile).
Risk profile: Low.
1Y return: 6.36% (bottom quartile).
1M return: 0.54% (bottom quartile).
Sharpe: 2.29 (bottom quartile).
Information ratio: 0.00 (bottom quartile).
Yield to maturity (debt): 6.50% (top quartile).
Modified duration: 0.17 yrs (upper mid).

Tata Liquid Fund

Bottom quartile AUM (₹27,603 Cr).
Established history (22+ yrs).
Rating: 4★ (bottom quartile).
Risk profile: Low.
1Y return: 6.35% (bottom quartile).
1M return: 0.54% (upper mid).
Sharpe: 2.49 (upper mid).
Information ratio: 0.00 (bottom quartile).
Yield to maturity (debt): 6.44% (bottom quartile).
Modified duration: 0.20 yrs (bottom quartile).

About the Fincash Research Team

At Fincash, our mission is to help investors make informed, confident decisions. With over 10 years in Mutual Fund distribution, our team blends deep industry expertise with a commitment to transparency, accuracy, and investor education.

Who We Are

AMFI Registration No.: 112358
MCA CIN: U74999MH2016PTC282153
Location: Thane, Maharashtra, India
Experience: 10+ years in Mutual Fund distribution

Our Expertise

Certified Mutual Fund Distributors with hands-on advisory experience.
Market analysts tracking performance, macro trends, and sectors.
Data specialists processing NAVs, allocations, and risk metrics from Morning Star.

Our Research Process

Data sourcing: SEBI-registered fund houses & verified third-party provider Morning Star
Screening: Returns, manager track record, expenses, sector mix, risk-adjusted metrics.
Expert review: Senior team members review every article and list for accuracy.
Updates: Regular refreshes so performance data reflects current market conditions.

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Disclaimer

Content is for educational and informational purposes only and is not investment advice. Please consider your risk profile and consult a financial advisor before investing.

Top Ultra Short Term Bond Funds

Ultra Short Duration Funds invest in debt and money market instruments with a short portfolio duration. They may be considered for short-term investment horizons.

Fund	NAV	Net Assets (Cr)	Min Investment	3 MO (%)	6 MO (%)	1 YR (%)	3 YR (%)	2025 (%)	Debt Yield (YTM)	Mod. Duration	Eff. Maturity
Aditya Birla Sun Life Savings Fund Growth	₹589.621 ↑ 0.08	₹18,189	1,000	2.1	3.2	6.3	7.2	7.4	7.45%	5M 26D	6M 18D
UTI Ultra Short Term Fund Growth	₹4,535.21 ↑ 0.50	₹3,444	5,000	1.9	3.1	5.9	6.7	6.6	7.13%	5M 20D	6M 23D
ICICI Prudential Ultra Short Term Fund Growth	₹29.7466 ↑ 0.01	₹15,455	5,000	2	3.2	6.2	7	7.1	7.17%	5M 8D	6M 18D
SBI Magnum Ultra Short Duration Fund Growth	₹6,410.9 ↑ 1.50	₹11,165	5,000	2.1	3.2	6.2	6.9	7	7%	4M 28D	8M 5D
Invesco India Ultra Short Term Fund Growth	₹2,891.97 ↑ 0.36	₹1,073	5,000	2	3.3	6.1	6.9	6.8	7.03%	5M 3D	5M 7D
Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 28 Aug 26

Research Highlights & Commentary of 5 Funds showcased

Commentary	Aditya Birla Sun Life Savings Fund	UTI Ultra Short Term Fund	ICICI Prudential Ultra Short Term Fund	SBI Magnum Ultra Short Duration Fund	Invesco India Ultra Short Term Fund
Point 1	Highest AUM (₹18,189 Cr).	Bottom quartile AUM (₹3,444 Cr).	Upper mid AUM (₹15,455 Cr).	Lower mid AUM (₹11,165 Cr).	Bottom quartile AUM (₹1,073 Cr).
Point 2	Established history (23+ yrs).	Established history (23+ yrs).	Established history (15+ yrs).	Oldest track record among peers (27 yrs).	Established history (15+ yrs).
Point 3	Top rated.	Rating: 4★ (upper mid).	Rating: 3★ (lower mid).	Rating: 3★ (bottom quartile).	Rating: 3★ (bottom quartile).
Point 4	Risk profile: Moderately Low.	Risk profile: Moderately Low.	Risk profile: Moderate.	Risk profile: Low.	Risk profile: Moderate.
Point 5	1Y return: 6.31% (top quartile).	1Y return: 5.93% (bottom quartile).	1Y return: 6.23% (upper mid).	1Y return: 6.19% (lower mid).	1Y return: 6.12% (bottom quartile).
Point 6	1M return: 0.54% (upper mid).	1M return: 0.51% (bottom quartile).	1M return: 0.52% (bottom quartile).	1M return: 0.54% (lower mid).	1M return: 0.56% (top quartile).
Point 7	Sharpe: 0.81 (top quartile).	Sharpe: 0.35 (bottom quartile).	Sharpe: 0.81 (upper mid).	Sharpe: 0.71 (lower mid).	Sharpe: 0.56 (bottom quartile).
Point 8	Information ratio: 0.00 (top quartile).	Information ratio: 0.00 (upper mid).	Information ratio: 0.00 (lower mid).	Information ratio: 0.00 (bottom quartile).	Information ratio: 0.00 (bottom quartile).
Point 9	Yield to maturity (debt): 7.45% (top quartile).	Yield to maturity (debt): 7.13% (lower mid).	Yield to maturity (debt): 7.17% (upper mid).	Yield to maturity (debt): 7.00% (bottom quartile).	Yield to maturity (debt): 7.03% (bottom quartile).
Point 10	Modified duration: 0.49 yrs (bottom quartile).	Modified duration: 0.47 yrs (bottom quartile).	Modified duration: 0.44 yrs (lower mid).	Modified duration: 0.41 yrs (top quartile).	Modified duration: 0.42 yrs (upper mid).

Aditya Birla Sun Life Savings Fund

Highest AUM (₹18,189 Cr).
Established history (23+ yrs).
Top rated.
Risk profile: Moderately Low.
1Y return: 6.31% (top quartile).
1M return: 0.54% (upper mid).
Sharpe: 0.81 (top quartile).
Information ratio: 0.00 (top quartile).
Yield to maturity (debt): 7.45% (top quartile).
Modified duration: 0.49 yrs (bottom quartile).

UTI Ultra Short Term Fund

Bottom quartile AUM (₹3,444 Cr).
Established history (23+ yrs).
Rating: 4★ (upper mid).
Risk profile: Moderately Low.
1Y return: 5.93% (bottom quartile).
1M return: 0.51% (bottom quartile).
Sharpe: 0.35 (bottom quartile).
Information ratio: 0.00 (upper mid).
Yield to maturity (debt): 7.13% (lower mid).
Modified duration: 0.47 yrs (bottom quartile).

ICICI Prudential Ultra Short Term Fund

Upper mid AUM (₹15,455 Cr).
Established history (15+ yrs).
Rating: 3★ (lower mid).
Risk profile: Moderate.
1Y return: 6.23% (upper mid).
1M return: 0.52% (bottom quartile).
Sharpe: 0.81 (upper mid).
Information ratio: 0.00 (lower mid).
Yield to maturity (debt): 7.17% (upper mid).
Modified duration: 0.44 yrs (lower mid).

SBI Magnum Ultra Short Duration Fund

Lower mid AUM (₹11,165 Cr).
Oldest track record among peers (27 yrs).
Rating: 3★ (bottom quartile).
Risk profile: Low.
1Y return: 6.19% (lower mid).
1M return: 0.54% (lower mid).
Sharpe: 0.71 (lower mid).
Information ratio: 0.00 (bottom quartile).
Yield to maturity (debt): 7.00% (bottom quartile).
Modified duration: 0.41 yrs (top quartile).

Invesco India Ultra Short Term Fund

Bottom quartile AUM (₹1,073 Cr).
Established history (15+ yrs).
Rating: 3★ (bottom quartile).
Risk profile: Moderate.
1Y return: 6.12% (bottom quartile).
1M return: 0.56% (top quartile).
Sharpe: 0.56 (bottom quartile).
Information ratio: 0.00 (bottom quartile).
Yield to maturity (debt): 7.03% (bottom quartile).
Modified duration: 0.42 yrs (upper mid).

Top Low Duration Funds

Low Duration Funds invest in debt and money market instruments with a Macaulay duration between 6 and 12 months.

Fund	NAV	Net Assets (Cr)	Min Investment	3 MO (%)	6 MO (%)	1 YR (%)	3 YR (%)	2025 (%)	Debt Yield (YTM)	Mod. Duration	Eff. Maturity
ICICI Prudential Savings Fund Growth	₹585.103 ↑ 0.05	₹21,735	500	2.2	3.1	6.3	7.4	7.7	7.26%	11M 12D	1Y 4M 13D
HDFC Low Duration Fund Growth	₹61.6796 ↑ 0.00	₹18,420	5,000	2	2.8	5.7	6.8	7.2	7.38%	10M 20D	1Y 7M 24D
SBI Magnum Low Duration Fund Growth	₹3,724.1 ↑ 0.58	₹13,102	5,000	2	2.7	5.5	6.7	7	7.07%	10M 24D	1Y 5M 26D
Kotak Low Duration Fund Growth	₹3,567.85 ↑ 0.44	₹12,083	5,000	2.1	2.8	5.6	6.7	7	7.42%	10M 20D	1Y 14D
Aditya Birla Sun Life Low Duration Fund Growth	₹699.014 ↑ 0.02	₹9,914	1,000	1.9	2.6	5.3	6.5	7	7.45%	1Y 4D	1Y 1M 24D
Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 28 Aug 26

Research Highlights & Commentary of 5 Funds showcased

Commentary	ICICI Prudential Savings Fund	HDFC Low Duration Fund	SBI Magnum Low Duration Fund	Kotak Low Duration Fund	Aditya Birla Sun Life Low Duration Fund
Point 1	Highest AUM (₹21,735 Cr).	Upper mid AUM (₹18,420 Cr).	Lower mid AUM (₹13,102 Cr).	Bottom quartile AUM (₹12,083 Cr).	Bottom quartile AUM (₹9,914 Cr).
Point 2	Established history (23+ yrs).	Established history (26+ yrs).	Established history (19+ yrs).	Established history (18+ yrs).	Oldest track record among peers (28 yrs).
Point 3	Top rated.	Rating: 3★ (lower mid).	Rating: 3★ (bottom quartile).	Rating: 4★ (upper mid).	Rating: 3★ (bottom quartile).
Point 4	Risk profile: Moderately Low.	Risk profile: Moderately Low.	Risk profile: Moderately Low.	Risk profile: Moderate.	Risk profile: Moderately Low.
Point 5	1Y return: 6.31% (top quartile).	1Y return: 5.65% (upper mid).	1Y return: 5.47% (bottom quartile).	1Y return: 5.57% (lower mid).	1Y return: 5.35% (bottom quartile).
Point 6	1M return: 0.48% (top quartile).	1M return: 0.38% (lower mid).	1M return: 0.38% (bottom quartile).	1M return: 0.40% (upper mid).	1M return: 0.32% (bottom quartile).
Point 7	Sharpe: 0.65 (top quartile).	Sharpe: 0.04 (upper mid).	Sharpe: -0.17 (bottom quartile).	Sharpe: -0.05 (lower mid).	Sharpe: -0.25 (bottom quartile).
Point 8	Information ratio: 0.00 (top quartile).	Information ratio: 0.00 (upper mid).	Information ratio: 0.00 (lower mid).	Information ratio: 0.00 (bottom quartile).	Information ratio: 0.00 (bottom quartile).
Point 9	Yield to maturity (debt): 7.26% (bottom quartile).	Yield to maturity (debt): 7.38% (lower mid).	Yield to maturity (debt): 7.07% (bottom quartile).	Yield to maturity (debt): 7.42% (upper mid).	Yield to maturity (debt): 7.45% (top quartile).
Point 10	Modified duration: 0.95 yrs (bottom quartile).	Modified duration: 0.89 yrs (top quartile).	Modified duration: 0.90 yrs (lower mid).	Modified duration: 0.89 yrs (upper mid).	Modified duration: 1.01 yrs (bottom quartile).

ICICI Prudential Savings Fund

Highest AUM (₹21,735 Cr).
Established history (23+ yrs).
Top rated.
Risk profile: Moderately Low.
1Y return: 6.31% (top quartile).
1M return: 0.48% (top quartile).
Sharpe: 0.65 (top quartile).
Information ratio: 0.00 (top quartile).
Yield to maturity (debt): 7.26% (bottom quartile).
Modified duration: 0.95 yrs (bottom quartile).

HDFC Low Duration Fund

Upper mid AUM (₹18,420 Cr).
Established history (26+ yrs).
Rating: 3★ (lower mid).
Risk profile: Moderately Low.
1Y return: 5.65% (upper mid).
1M return: 0.38% (lower mid).
Sharpe: 0.04 (upper mid).
Information ratio: 0.00 (upper mid).
Yield to maturity (debt): 7.38% (lower mid).
Modified duration: 0.89 yrs (top quartile).

SBI Magnum Low Duration Fund

Lower mid AUM (₹13,102 Cr).
Established history (19+ yrs).
Rating: 3★ (bottom quartile).
Risk profile: Moderately Low.
1Y return: 5.47% (bottom quartile).
1M return: 0.38% (bottom quartile).
Sharpe: -0.17 (bottom quartile).
Information ratio: 0.00 (lower mid).
Yield to maturity (debt): 7.07% (bottom quartile).
Modified duration: 0.90 yrs (lower mid).

Kotak Low Duration Fund

Bottom quartile AUM (₹12,083 Cr).
Established history (18+ yrs).
Rating: 4★ (upper mid).
Risk profile: Moderate.
1Y return: 5.57% (lower mid).
1M return: 0.40% (upper mid).
Sharpe: -0.05 (lower mid).
Information ratio: 0.00 (bottom quartile).
Yield to maturity (debt): 7.42% (upper mid).
Modified duration: 0.89 yrs (upper mid).

Aditya Birla Sun Life Low Duration Fund

Bottom quartile AUM (₹9,914 Cr).
Oldest track record among peers (28 yrs).
Rating: 3★ (bottom quartile).
Risk profile: Moderately Low.
1Y return: 5.35% (bottom quartile).
1M return: 0.32% (bottom quartile).
Sharpe: -0.25 (bottom quartile).
Information ratio: 0.00 (bottom quartile).
Yield to maturity (debt): 7.45% (top quartile).
Modified duration: 1.01 yrs (bottom quartile).

Top Money Market Mutual Funds

Money Market Funds invest in money market instruments with a maturity of up to one year.

Fund	NAV	Net Assets (Cr)	Min Investment	3 MO (%)	6 MO (%)	1 YR (%)	3 YR (%)	2025 (%)	Debt Yield (YTM)	Mod. Duration	Eff. Maturity
Aditya Birla Sun Life Money Manager Fund Growth	₹398.377 ↑ 0.07	₹30,160	1,000	2.3	3.4	6.4	7.3	7.4	6.95%	6M 25D	6M 29D
UTI Money Market Fund Growth	₹3,321.01 ↑ 0.56	₹18,782	10,000	2.2	3.3	6.4	7.3	7.5	6.87%	6M 19D	6M 19D
Kotak Money Market Scheme Growth	₹4,833.12 ↑ 0.80	₹30,297	5,000	2.2	3.3	6.3	7.2	7.4	6.87%	6M 18D	6M 18D
ICICI Prudential Money Market Fund Growth	₹408.404 ↑ 0.07	₹34,627	500	2.2	3.3	6.3	7.3	7.4	6.82%	6M 15D	6M 29D
Tata Money Market Fund Growth	₹5,082.82 ↑ 0.81	₹34,138	5,000	2.2	3.3	6.3	7.3	7.4	6.81%	6M 5D	6M 5D
Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 28 Aug 26

Research Highlights & Commentary of 5 Funds showcased

Commentary	Aditya Birla Sun Life Money Manager Fund	UTI Money Market Fund	Kotak Money Market Scheme	ICICI Prudential Money Market Fund	Tata Money Market Fund
Point 1	Bottom quartile AUM (₹30,160 Cr).	Bottom quartile AUM (₹18,782 Cr).	Lower mid AUM (₹30,297 Cr).	Highest AUM (₹34,627 Cr).	Upper mid AUM (₹34,138 Cr).
Point 2	Established history (20+ yrs).	Established history (17+ yrs).	Oldest track record among peers (23 yrs).	Established history (20+ yrs).	Established history (23+ yrs).
Point 3	Top rated.	Rating: 4★ (upper mid).	Rating: 4★ (lower mid).	Rating: 4★ (bottom quartile).	Rating: 3★ (bottom quartile).
Point 4	Risk profile: Low.	Risk profile: Low.	Risk profile: Low.	Risk profile: Low.	Risk profile: Low.
Point 5	1Y return: 6.35% (upper mid).	1Y return: 6.37% (top quartile).	1Y return: 6.32% (bottom quartile).	1Y return: 6.30% (bottom quartile).	1Y return: 6.33% (lower mid).
Point 6	1M return: 0.61% (top quartile).	1M return: 0.60% (upper mid).	1M return: 0.58% (bottom quartile).	1M return: 0.59% (lower mid).	1M return: 0.59% (bottom quartile).
Point 7	Sharpe: 0.63 (bottom quartile).	Sharpe: 0.73 (upper mid).	Sharpe: 0.68 (lower mid).	Sharpe: 0.64 (bottom quartile).	Sharpe: 0.74 (top quartile).
Point 8	Information ratio: 0.00 (top quartile).	Information ratio: 0.00 (upper mid).	Information ratio: 0.00 (lower mid).	Information ratio: 0.00 (bottom quartile).	Information ratio: 0.00 (bottom quartile).
Point 9	Yield to maturity (debt): 6.95% (top quartile).	Yield to maturity (debt): 6.87% (upper mid).	Yield to maturity (debt): 6.87% (lower mid).	Yield to maturity (debt): 6.82% (bottom quartile).	Yield to maturity (debt): 6.81% (bottom quartile).
Point 10	Modified duration: 0.57 yrs (bottom quartile).	Modified duration: 0.55 yrs (bottom quartile).	Modified duration: 0.55 yrs (lower mid).	Modified duration: 0.54 yrs (upper mid).	Modified duration: 0.51 yrs (top quartile).

Aditya Birla Sun Life Money Manager Fund

Bottom quartile AUM (₹30,160 Cr).
Established history (20+ yrs).
Top rated.
Risk profile: Low.
1Y return: 6.35% (upper mid).
1M return: 0.61% (top quartile).
Sharpe: 0.63 (bottom quartile).
Information ratio: 0.00 (top quartile).
Yield to maturity (debt): 6.95% (top quartile).
Modified duration: 0.57 yrs (bottom quartile).

UTI Money Market Fund

Bottom quartile AUM (₹18,782 Cr).
Established history (17+ yrs).
Rating: 4★ (upper mid).
Risk profile: Low.
1Y return: 6.37% (top quartile).
1M return: 0.60% (upper mid).
Sharpe: 0.73 (upper mid).
Information ratio: 0.00 (upper mid).
Yield to maturity (debt): 6.87% (upper mid).
Modified duration: 0.55 yrs (bottom quartile).

Kotak Money Market Scheme

Lower mid AUM (₹30,297 Cr).
Oldest track record among peers (23 yrs).
Rating: 4★ (lower mid).
Risk profile: Low.
1Y return: 6.32% (bottom quartile).
1M return: 0.58% (bottom quartile).
Sharpe: 0.68 (lower mid).
Information ratio: 0.00 (lower mid).
Yield to maturity (debt): 6.87% (lower mid).
Modified duration: 0.55 yrs (lower mid).

ICICI Prudential Money Market Fund

Highest AUM (₹34,627 Cr).
Established history (20+ yrs).
Rating: 4★ (bottom quartile).
Risk profile: Low.
1Y return: 6.30% (bottom quartile).
1M return: 0.59% (lower mid).
Sharpe: 0.64 (bottom quartile).
Information ratio: 0.00 (bottom quartile).
Yield to maturity (debt): 6.82% (bottom quartile).
Modified duration: 0.54 yrs (upper mid).

Tata Money Market Fund

Upper mid AUM (₹34,138 Cr).
Established history (23+ yrs).
Rating: 3★ (bottom quartile).
Risk profile: Low.
1Y return: 6.33% (lower mid).
1M return: 0.59% (bottom quartile).
Sharpe: 0.74 (top quartile).
Information ratio: 0.00 (bottom quartile).
Yield to maturity (debt): 6.81% (bottom quartile).
Modified duration: 0.51 yrs (top quartile).

Top Short Duration Funds

Short Duration Funds invest in debt and money market instruments with a Macaulay duration between 1 and 3 years.

Fund	NAV	Net Assets (Cr)	3 MO (%)	6 MO (%)	1 YR (%)	3 YR (%)	2025 (%)	Debt Yield (YTM)	Mod. Duration	Eff. Maturity
PGIM India Short Maturity Fund Growth	₹39.3202 ↓ 0.00	₹28	1.2	3.1	6.1	4.2		7.18%	1Y 7M 28D	1Y 11M 1D
ICICI Prudential Short Term Fund Growth	₹64.3626 ↓ -0.02	₹19,260	2.3	2.8	5.8	7.2	8	7.61%	2Y 11M 5D	4Y 10M 13D
Aditya Birla Sun Life Short Term Opportunities Fund Growth	₹50.6206 ↓ -0.02	₹5,831	2.3	2.5	5.4	7	7.7	7.76%	2Y 8M 16D	3Y 6M 18D
Nippon India Short Term Fund Growth	₹56.1756 ↓ -0.01	₹7,189	2.3	2.3	5.4	7.1	7.9	7.46%	2Y 5M 19D	2Y 11M 5D
UTI Short Term Income Fund Growth	₹33.6609 ↓ -0.02	₹2,039	2.1	2.5	5.1	6.9	7.3	7.38%	2Y 3M 14D	3Y 29D
Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 29 Sep 23

Research Highlights & Commentary of 5 Funds showcased

Commentary	PGIM India Short Maturity Fund	ICICI Prudential Short Term Fund	Aditya Birla Sun Life Short Term Opportunities Fund	Nippon India Short Term Fund	UTI Short Term Income Fund
Point 1	Bottom quartile AUM (₹28 Cr).	Highest AUM (₹19,260 Cr).	Lower mid AUM (₹5,831 Cr).	Upper mid AUM (₹7,189 Cr).	Bottom quartile AUM (₹2,039 Cr).
Point 2	Established history (23+ yrs).	Oldest track record among peers (24 yrs).	Established history (23+ yrs).	Established history (23+ yrs).	Established history (18+ yrs).
Point 3	Top rated.	Rating: 4★ (upper mid).	Rating: 4★ (lower mid).	Rating: 4★ (bottom quartile).	Rating: 4★ (bottom quartile).
Point 4	Risk profile: Moderate.	Risk profile: Moderate.	Risk profile: Moderate.	Risk profile: Moderately Low.	Risk profile: Moderate.
Point 5	1Y return: 6.08% (top quartile).	1Y return: 5.83% (upper mid).	1Y return: 5.40% (lower mid).	1Y return: 5.35% (bottom quartile).	1Y return: 5.07% (bottom quartile).
Point 6	1M return: 0.43% (top quartile).	1M return: 0.24% (upper mid).	1M return: 0.11% (bottom quartile).	1M return: 0.08% (bottom quartile).	1M return: 0.13% (lower mid).
Point 7	Sharpe: -0.98 (bottom quartile).	Sharpe: 0.06 (top quartile).	Sharpe: -0.12 (upper mid).	Sharpe: -0.15 (lower mid).	Sharpe: -0.28 (bottom quartile).
Point 8	Information ratio: 0.00 (top quartile).	Information ratio: 0.00 (upper mid).	Information ratio: 0.00 (lower mid).	Information ratio: 0.00 (bottom quartile).	Information ratio: 0.00 (bottom quartile).
Point 9	Yield to maturity (debt): 7.18% (bottom quartile).	Yield to maturity (debt): 7.61% (upper mid).	Yield to maturity (debt): 7.76% (top quartile).	Yield to maturity (debt): 7.46% (lower mid).	Yield to maturity (debt): 7.38% (bottom quartile).
Point 10	Modified duration: 1.66 yrs (top quartile).	Modified duration: 2.93 yrs (bottom quartile).	Modified duration: 2.71 yrs (bottom quartile).	Modified duration: 2.47 yrs (lower mid).	Modified duration: 2.29 yrs (upper mid).

PGIM India Short Maturity Fund

Bottom quartile AUM (₹28 Cr).
Established history (23+ yrs).
Top rated.
Risk profile: Moderate.
1Y return: 6.08% (top quartile).
1M return: 0.43% (top quartile).
Sharpe: -0.98 (bottom quartile).
Information ratio: 0.00 (top quartile).
Yield to maturity (debt): 7.18% (bottom quartile).
Modified duration: 1.66 yrs (top quartile).

ICICI Prudential Short Term Fund

Highest AUM (₹19,260 Cr).
Oldest track record among peers (24 yrs).
Rating: 4★ (upper mid).
Risk profile: Moderate.
1Y return: 5.83% (upper mid).
1M return: 0.24% (upper mid).
Sharpe: 0.06 (top quartile).
Information ratio: 0.00 (upper mid).
Yield to maturity (debt): 7.61% (upper mid).
Modified duration: 2.93 yrs (bottom quartile).

Aditya Birla Sun Life Short Term Opportunities Fund

Lower mid AUM (₹5,831 Cr).
Established history (23+ yrs).
Rating: 4★ (lower mid).
Risk profile: Moderate.
1Y return: 5.40% (lower mid).
1M return: 0.11% (bottom quartile).
Sharpe: -0.12 (upper mid).
Information ratio: 0.00 (lower mid).
Yield to maturity (debt): 7.76% (top quartile).
Modified duration: 2.71 yrs (bottom quartile).

Nippon India Short Term Fund

Upper mid AUM (₹7,189 Cr).
Established history (23+ yrs).
Rating: 4★ (bottom quartile).
Risk profile: Moderately Low.
1Y return: 5.35% (bottom quartile).
1M return: 0.08% (bottom quartile).
Sharpe: -0.15 (lower mid).
Information ratio: 0.00 (bottom quartile).
Yield to maturity (debt): 7.46% (lower mid).
Modified duration: 2.47 yrs (lower mid).

UTI Short Term Income Fund

Bottom quartile AUM (₹2,039 Cr).
Established history (18+ yrs).
Rating: 4★ (bottom quartile).
Risk profile: Moderate.
1Y return: 5.07% (bottom quartile).
1M return: 0.13% (lower mid).
Sharpe: -0.28 (bottom quartile).
Information ratio: 0.00 (bottom quartile).
Yield to maturity (debt): 7.38% (bottom quartile).
Modified duration: 2.29 yrs (upper mid).

Top Medium Duration Funds

Medium Duration Funds invest in debt and money market instruments with a Macaulay duration between 3 and 4 years.

Fund	NAV	Net Assets (Cr)	3 MO (%)	6 MO (%)	1 YR (%)	3 YR (%)	2025 (%)	Debt Yield (YTM)	Mod. Duration	Eff. Maturity
SBI Magnum Medium Duration Fund Growth	₹54.8693 ↓ -0.02	₹6,498	2.8	3.3	6.6	7.3	7.5	8.05%	3Y 25D	4Y 4M 20D
ICICI Prudential Medium Term Bond Fund Growth	₹48.5746 ↓ -0.01	₹5,481	2.7	3.4	7.4	7.8	9	8.06%	3Y 4M 2D	6Y 3M 29D
HDFC Medium Term Debt Fund Growth	₹60.295 ↓ -0.02	₹3,614	2.6	3	6.4	7.2	7.7	8.05%	3Y 7D	4Y 5M 16D
Aditya Birla Sun Life Medium Term Plan Growth	₹43.7327 ↓ -0.02	₹3,280	2.6	3.2	8.6	9.8	10.9	8.05%	3Y 1M 20D	4Y 7M 24D
Kotak Dynamic Bond Fund Growth	₹39.6428 ↓ 0.00	₹2,366	3.2	3.4	6.9	7.1	5.9	7.72%	7Y 11D	17Y 1M 28D
Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 28 Aug 26

Research Highlights & Commentary of 5 Funds showcased

Commentary	SBI Magnum Medium Duration Fund	ICICI Prudential Medium Term Bond Fund	HDFC Medium Term Debt Fund	Aditya Birla Sun Life Medium Term Plan	Kotak Dynamic Bond Fund
Point 1	Highest AUM (₹6,498 Cr).	Upper mid AUM (₹5,481 Cr).	Lower mid AUM (₹3,614 Cr).	Bottom quartile AUM (₹3,280 Cr).	Bottom quartile AUM (₹2,366 Cr).
Point 2	Established history (22+ yrs).	Established history (21+ yrs).	Oldest track record among peers (24 yrs).	Established history (17+ yrs).	Established history (18+ yrs).
Point 3	Rating: 3★ (upper mid).	Rating: 2★ (bottom quartile).	Rating: 3★ (lower mid).	Top rated.	Rating: 3★ (bottom quartile).
Point 4	Risk profile: Moderate.	Risk profile: Moderate.	Risk profile: Moderate.	Risk profile: Moderate.	Risk profile: Moderately Low.
Point 5	1Y return: 6.62% (bottom quartile).	1Y return: 7.41% (upper mid).	1Y return: 6.37% (bottom quartile).	1Y return: 8.64% (top quartile).	1Y return: 6.93% (lower mid).
Point 6	1M return: 0.44% (upper mid).	1M return: 0.47% (top quartile).	1M return: 0.31% (lower mid).	1M return: 0.21% (bottom quartile).	1M return: 0.29% (bottom quartile).
Point 7	Sharpe: 0.18 (lower mid).	Sharpe: 0.58 (upper mid).	Sharpe: 0.14 (bottom quartile).	Sharpe: 1.10 (top quartile).	Sharpe: -0.13 (bottom quartile).
Point 8	Information ratio: 0.00 (top quartile).	Information ratio: 0.00 (upper mid).	Information ratio: 0.00 (lower mid).	Information ratio: 0.00 (bottom quartile).	Information ratio: 0.00 (bottom quartile).
Point 9	Yield to maturity (debt): 8.05% (upper mid).	Yield to maturity (debt): 8.06% (top quartile).	Yield to maturity (debt): 8.05% (lower mid).	Yield to maturity (debt): 8.05% (bottom quartile).	Yield to maturity (debt): 7.72% (bottom quartile).
Point 10	Modified duration: 3.07 yrs (upper mid).	Modified duration: 3.34 yrs (bottom quartile).	Modified duration: 3.02 yrs (top quartile).	Modified duration: 3.14 yrs (lower mid).	Modified duration: 7.03 yrs (bottom quartile).

SBI Magnum Medium Duration Fund

Highest AUM (₹6,498 Cr).
Established history (22+ yrs).
Rating: 3★ (upper mid).
Risk profile: Moderate.
1Y return: 6.62% (bottom quartile).
1M return: 0.44% (upper mid).
Sharpe: 0.18 (lower mid).
Information ratio: 0.00 (top quartile).
Yield to maturity (debt): 8.05% (upper mid).
Modified duration: 3.07 yrs (upper mid).

ICICI Prudential Medium Term Bond Fund

Upper mid AUM (₹5,481 Cr).
Established history (21+ yrs).
Rating: 2★ (bottom quartile).
Risk profile: Moderate.
1Y return: 7.41% (upper mid).
1M return: 0.47% (top quartile).
Sharpe: 0.58 (upper mid).
Information ratio: 0.00 (upper mid).
Yield to maturity (debt): 8.06% (top quartile).
Modified duration: 3.34 yrs (bottom quartile).

HDFC Medium Term Debt Fund

Lower mid AUM (₹3,614 Cr).
Oldest track record among peers (24 yrs).
Rating: 3★ (lower mid).
Risk profile: Moderate.
1Y return: 6.37% (bottom quartile).
1M return: 0.31% (lower mid).
Sharpe: 0.14 (bottom quartile).
Information ratio: 0.00 (lower mid).
Yield to maturity (debt): 8.05% (lower mid).
Modified duration: 3.02 yrs (top quartile).

Aditya Birla Sun Life Medium Term Plan

Bottom quartile AUM (₹3,280 Cr).
Established history (17+ yrs).
Top rated.
Risk profile: Moderate.
1Y return: 8.64% (top quartile).
1M return: 0.21% (bottom quartile).
Sharpe: 1.10 (top quartile).
Information ratio: 0.00 (bottom quartile).
Yield to maturity (debt): 8.05% (bottom quartile).
Modified duration: 3.14 yrs (lower mid).

Kotak Dynamic Bond Fund

Bottom quartile AUM (₹2,366 Cr).
Established history (18+ yrs).
Rating: 3★ (bottom quartile).
Risk profile: Moderately Low.
1Y return: 6.93% (lower mid).
1M return: 0.29% (bottom quartile).
Sharpe: -0.13 (bottom quartile).
Information ratio: 0.00 (bottom quartile).
Yield to maturity (debt): 7.72% (bottom quartile).
Modified duration: 7.03 yrs (bottom quartile).

Top Medium to Long Term Bond Funds

Medium to Long Duration Funds invest in debt and money market instruments with a Macaulay duration between 4 and 7 years.

Fund	NAV	Net Assets (Cr)	3 MO (%)	6 MO (%)	1 YR (%)	3 YR (%)	2025 (%)	Debt Yield (YTM)	Mod. Duration	Eff. Maturity
SBI Magnum Income Fund Growth	₹73.7718 ↓ -0.08	₹2,051	2.4	2.2	4.6	6.3	5.9	7.7%	4Y 11M 8D	9Y 14D
ICICI Prudential Bond Fund Growth	₹42.3276 ↓ -0.02	₹1,983	2.8	2.6	5.4	7	6.7	7.45%	6Y 7M 2D	14Y 4M 24D
Aditya Birla Sun Life Income Fund Growth	₹129.988 ↓ -0.09	₹1,780	2.7	1.9	4.2	5.9	5.1	7.47%	6Y 8M 5D	15Y 18D
Kotak Bond Fund Growth	₹80.1155 ↓ -0.09	₹1,795	3.1	2.5	5	6.3	5.4	7.41%	6Y 5M 1D	11Y 11M 1D
HDFC Income Fund Growth	₹60.5632 ↓ -0.08	₹830	2.7	2.2	4.6	6.4	5.5	7.09%	6Y 7M 17D	13Y 14D
Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 28 Aug 26

Research Highlights & Commentary of 5 Funds showcased

Commentary	SBI Magnum Income Fund	ICICI Prudential Bond Fund	Aditya Birla Sun Life Income Fund	Kotak Bond Fund	HDFC Income Fund
Point 1	Highest AUM (₹2,051 Cr).	Upper mid AUM (₹1,983 Cr).	Bottom quartile AUM (₹1,780 Cr).	Lower mid AUM (₹1,795 Cr).	Bottom quartile AUM (₹830 Cr).
Point 2	Established history (27+ yrs).	Established history (18+ yrs).	Oldest track record among peers (30 yrs).	Established history (26+ yrs).	Established history (25+ yrs).
Point 3	Top rated.	Rating: 3★ (upper mid).	Rating: 3★ (lower mid).	Rating: 2★ (bottom quartile).	Rating: 2★ (bottom quartile).
Point 4	Risk profile: Moderate.	Risk profile: Moderate.	Risk profile: Moderate.	Risk profile: Moderate.	Risk profile: Moderate.
Point 5	1Y return: 4.63% (lower mid).	1Y return: 5.36% (top quartile).	1Y return: 4.16% (bottom quartile).	1Y return: 4.99% (upper mid).	1Y return: 4.61% (bottom quartile).
Point 6	1M return: -0.08% (lower mid).	1M return: 0.05% (top quartile).	1M return: -0.11% (bottom quartile).	1M return: 0.05% (upper mid).	1M return: -0.21% (bottom quartile).
Point 7	Sharpe: -0.50 (bottom quartile).	Sharpe: -0.39 (top quartile).	Sharpe: -0.64 (bottom quartile).	Sharpe: -0.46 (upper mid).	Sharpe: -0.47 (lower mid).
Point 8	Information ratio: 0.00 (top quartile).	Information ratio: 0.00 (upper mid).	Information ratio: 0.00 (lower mid).	Information ratio: 0.00 (bottom quartile).	Information ratio: 0.00 (bottom quartile).
Point 9	Yield to maturity (debt): 7.70% (top quartile).	Yield to maturity (debt): 7.45% (lower mid).	Yield to maturity (debt): 7.47% (upper mid).	Yield to maturity (debt): 7.41% (bottom quartile).	Yield to maturity (debt): 7.09% (bottom quartile).
Point 10	Modified duration: 4.94 yrs (top quartile).	Modified duration: 6.59 yrs (lower mid).	Modified duration: 6.68 yrs (bottom quartile).	Modified duration: 6.42 yrs (upper mid).	Modified duration: 6.63 yrs (bottom quartile).

SBI Magnum Income Fund

Highest AUM (₹2,051 Cr).
Established history (27+ yrs).
Top rated.
Risk profile: Moderate.
1Y return: 4.63% (lower mid).
1M return: -0.08% (lower mid).
Sharpe: -0.50 (bottom quartile).
Information ratio: 0.00 (top quartile).
Yield to maturity (debt): 7.70% (top quartile).
Modified duration: 4.94 yrs (top quartile).

ICICI Prudential Bond Fund

Upper mid AUM (₹1,983 Cr).
Established history (18+ yrs).
Rating: 3★ (upper mid).
Risk profile: Moderate.
1Y return: 5.36% (top quartile).
1M return: 0.05% (top quartile).
Sharpe: -0.39 (top quartile).
Information ratio: 0.00 (upper mid).
Yield to maturity (debt): 7.45% (lower mid).
Modified duration: 6.59 yrs (lower mid).

Aditya Birla Sun Life Income Fund

Bottom quartile AUM (₹1,780 Cr).
Oldest track record among peers (30 yrs).
Rating: 3★ (lower mid).
Risk profile: Moderate.
1Y return: 4.16% (bottom quartile).
1M return: -0.11% (bottom quartile).
Sharpe: -0.64 (bottom quartile).
Information ratio: 0.00 (lower mid).
Yield to maturity (debt): 7.47% (upper mid).
Modified duration: 6.68 yrs (bottom quartile).

Kotak Bond Fund

Lower mid AUM (₹1,795 Cr).
Established history (26+ yrs).
Rating: 2★ (bottom quartile).
Risk profile: Moderate.
1Y return: 4.99% (upper mid).
1M return: 0.05% (upper mid).
Sharpe: -0.46 (upper mid).
Information ratio: 0.00 (bottom quartile).
Yield to maturity (debt): 7.41% (bottom quartile).
Modified duration: 6.42 yrs (upper mid).

HDFC Income Fund

Bottom quartile AUM (₹830 Cr).
Established history (25+ yrs).
Rating: 2★ (bottom quartile).
Risk profile: Moderate.
1Y return: 4.61% (bottom quartile).
1M return: -0.21% (bottom quartile).
Sharpe: -0.47 (lower mid).
Information ratio: 0.00 (bottom quartile).
Yield to maturity (debt): 7.09% (bottom quartile).
Modified duration: 6.63 yrs (bottom quartile).

Top Long Duration Funds

Long Duration Funds invest in debt and money market instruments with a Macaulay duration of more than 7 years.

Fund	NAV	Net Assets (Cr)	3 MO (%)	6 MO (%)	1 YR (%)	3 YR (%)	2025 (%)	Debt Yield (YTM)	Mod. Duration	Eff. Maturity
ICICI Prudential Long Term Bond Fund Growth	₹92.5513 ↓ -0.01	₹843	3.1	1.6	4.1	6.3	5.1	7.64%	11Y 18D	28Y 11M 12D
Bandhan Bond Fund Long Term Plan Growth	₹67.8235 ↓ -0.07	₹427	2.4	3.4	5.7	5.9	4	7.17%	6Y 5M 12D	13Y 11M 23D
Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 28 Aug 26

Research Highlights & Commentary of 2 Funds showcased

Commentary	ICICI Prudential Long Term Bond Fund	Bandhan Bond Fund Long Term Plan
Point 1	Highest AUM (₹843 Cr).	Bottom quartile AUM (₹427 Cr).
Point 2	Oldest track record among peers (28 yrs).	Established history (26+ yrs).
Point 3	Top rated.	Not Rated.
Point 4	Risk profile: Moderate.	Risk profile: Moderate.
Point 5	1Y return: 4.10% (bottom quartile).	1Y return: 5.68% (upper mid).
Point 6	1M return: 0.00% (upper mid).	1M return: -0.16% (bottom quartile).
Point 7	Sharpe: -0.59 (bottom quartile).	Sharpe: -0.24 (upper mid).
Point 8	Information ratio: 0.00 (upper mid).	Information ratio: 0.00 (bottom quartile).
Point 9	Yield to maturity (debt): 7.64% (upper mid).	Yield to maturity (debt): 7.17% (bottom quartile).
Point 10	Modified duration: 11.05 yrs (bottom quartile).	Modified duration: 6.45 yrs (upper mid).

ICICI Prudential Long Term Bond Fund

Highest AUM (₹843 Cr).
Oldest track record among peers (28 yrs).
Top rated.
Risk profile: Moderate.
1Y return: 4.10% (bottom quartile).
1M return: 0.00% (upper mid).
Sharpe: -0.59 (bottom quartile).
Information ratio: 0.00 (upper mid).
Yield to maturity (debt): 7.64% (upper mid).
Modified duration: 11.05 yrs (bottom quartile).

Bandhan Bond Fund Long Term Plan

Bottom quartile AUM (₹427 Cr).
Established history (26+ yrs).
Not Rated.
Risk profile: Moderate.
1Y return: 5.68% (upper mid).
1M return: -0.16% (bottom quartile).
Sharpe: -0.24 (upper mid).
Information ratio: 0.00 (bottom quartile).
Yield to maturity (debt): 7.17% (bottom quartile).
Modified duration: 6.45 yrs (upper mid).

Top Dynamic Bond Funds

Dynamic Bond Funds invest across different maturities. The fund manager can change the portfolio duration based on the interest-rate outlook.

Fund	NAV	Net Assets (Cr)	3 MO (%)	6 MO (%)	1 YR (%)	3 YR (%)	2025 (%)	Debt Yield (YTM)	Mod. Duration	Eff. Maturity
SBI Dynamic Bond Fund Growth	₹37.5059 ↓ 0.00	₹3,682	2.1	2.7	5.3	6.6	5.5	7.13%	3Y 3M 14D	5Y 11M 26D
Bandhan Dynamic Bond Fund Growth	₹35.7397 ↓ -0.03	₹1,961	3	4.3	7.2	6.7	3.4	7.32%	9Y 8M 8D	23Y 18D
Axis Dynamic Bond Fund Growth	₹31.5533 ↓ -0.03	₹996	2.8	3.3	6.6	7.3	7.1	7.11%	5Y 9M 4D	13Y 3M 14D
Aditya Birla Sun Life Dynamic Bond Fund Growth	₹48.993 ↓ -0.03	₹1,441	2.4	2.7	5.6	7.1	7	8.08%	5Y 3M 18D	11Y 11M 8D
HDFC Dynamic Debt Fund Growth	₹93.4665 ↓ -0.07	₹525	3.2	2.7	5.5	6.3	4.7	7.17%	7Y 10M 20D	20Y 9M 11D
Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 28 Aug 26

Research Highlights & Commentary of 5 Funds showcased

Commentary	SBI Dynamic Bond Fund	Bandhan Dynamic Bond Fund	Axis Dynamic Bond Fund	Aditya Birla Sun Life Dynamic Bond Fund	HDFC Dynamic Debt Fund
Point 1	Highest AUM (₹3,682 Cr).	Upper mid AUM (₹1,961 Cr).	Bottom quartile AUM (₹996 Cr).	Lower mid AUM (₹1,441 Cr).	Bottom quartile AUM (₹525 Cr).
Point 2	Established history (22+ yrs).	Established history (17+ yrs).	Established history (15+ yrs).	Established history (21+ yrs).	Oldest track record among peers (29 yrs).
Point 3	Top rated.	Rating: 3★ (upper mid).	Rating: 3★ (lower mid).	Rating: 3★ (bottom quartile).	Rating: 3★ (bottom quartile).
Point 4	Risk profile: Moderate.	Risk profile: Moderate.	Risk profile: Moderate.	Risk profile: Moderate.	Risk profile: Moderate.
Point 5	1Y return: 5.31% (bottom quartile).	1Y return: 7.19% (top quartile).	1Y return: 6.61% (upper mid).	1Y return: 5.63% (lower mid).	1Y return: 5.52% (bottom quartile).
Point 6	1M return: 0.03% (lower mid).	1M return: -0.09% (bottom quartile).	1M return: 0.09% (upper mid).	1M return: 0.01% (bottom quartile).	1M return: 0.31% (top quartile).
Point 7	Sharpe: -0.43 (bottom quartile).	Sharpe: -0.07 (upper mid).	Sharpe: 0.05 (top quartile).	Sharpe: -0.27 (lower mid).	Sharpe: -0.45 (bottom quartile).
Point 8	Information ratio: 0.00 (top quartile).	Information ratio: 0.00 (upper mid).	Information ratio: 0.00 (lower mid).	Information ratio: 0.00 (bottom quartile).	Information ratio: 0.00 (bottom quartile).
Point 9	Yield to maturity (debt): 7.13% (bottom quartile).	Yield to maturity (debt): 7.32% (upper mid).	Yield to maturity (debt): 7.11% (bottom quartile).	Yield to maturity (debt): 8.08% (top quartile).	Yield to maturity (debt): 7.17% (lower mid).
Point 10	Modified duration: 3.29 yrs (top quartile).	Modified duration: 9.69 yrs (bottom quartile).	Modified duration: 5.76 yrs (lower mid).	Modified duration: 5.30 yrs (upper mid).	Modified duration: 7.89 yrs (bottom quartile).

SBI Dynamic Bond Fund

Highest AUM (₹3,682 Cr).
Established history (22+ yrs).
Top rated.
Risk profile: Moderate.
1Y return: 5.31% (bottom quartile).
1M return: 0.03% (lower mid).
Sharpe: -0.43 (bottom quartile).
Information ratio: 0.00 (top quartile).
Yield to maturity (debt): 7.13% (bottom quartile).
Modified duration: 3.29 yrs (top quartile).

Bandhan Dynamic Bond Fund

Upper mid AUM (₹1,961 Cr).
Established history (17+ yrs).
Rating: 3★ (upper mid).
Risk profile: Moderate.
1Y return: 7.19% (top quartile).
1M return: -0.09% (bottom quartile).
Sharpe: -0.07 (upper mid).
Information ratio: 0.00 (upper mid).
Yield to maturity (debt): 7.32% (upper mid).
Modified duration: 9.69 yrs (bottom quartile).

Axis Dynamic Bond Fund

Bottom quartile AUM (₹996 Cr).
Established history (15+ yrs).
Rating: 3★ (lower mid).
Risk profile: Moderate.
1Y return: 6.61% (upper mid).
1M return: 0.09% (upper mid).
Sharpe: 0.05 (top quartile).
Information ratio: 0.00 (lower mid).
Yield to maturity (debt): 7.11% (bottom quartile).
Modified duration: 5.76 yrs (lower mid).

Aditya Birla Sun Life Dynamic Bond Fund

Lower mid AUM (₹1,441 Cr).
Established history (21+ yrs).
Rating: 3★ (bottom quartile).
Risk profile: Moderate.
1Y return: 5.63% (lower mid).
1M return: 0.01% (bottom quartile).
Sharpe: -0.27 (lower mid).
Information ratio: 0.00 (bottom quartile).
Yield to maturity (debt): 8.08% (top quartile).
Modified duration: 5.30 yrs (upper mid).

HDFC Dynamic Debt Fund

Bottom quartile AUM (₹525 Cr).
Oldest track record among peers (29 yrs).
Rating: 3★ (bottom quartile).
Risk profile: Moderate.
1Y return: 5.52% (bottom quartile).
1M return: 0.31% (top quartile).
Sharpe: -0.45 (bottom quartile).
Information ratio: 0.00 (bottom quartile).
Yield to maturity (debt): 7.17% (lower mid).
Modified duration: 7.89 yrs (bottom quartile).

Top Corporate Bond Funds

Corporate Bond Funds predominantly invest in highly rated corporate bonds, subject to the applicable category requirements.

Fund	NAV	Net Assets (Cr)	3 MO (%)	6 MO (%)	1 YR (%)	3 YR (%)	2025 (%)	Debt Yield (YTM)	Mod. Duration	Eff. Maturity
Aditya Birla Sun Life Corporate Bond Fund Growth	₹119.424 ↓ -0.08	₹23,623	2.4	2.3	5.1	7	7.4	7.34%	4Y 1M 6D	6Y 7M 28D
HDFC Corporate Bond Fund Growth	₹34.3589 ↓ -0.02	₹30,664	2.4	2.2	4.8	6.9	7.3	7.31%	4Y 2M 16D	7Y 1M 6D
ICICI Prudential Corporate Bond Fund Growth	₹31.9282 ↓ -0.01	₹30,202	2.4	2.8	5.9	7.3	8	7.35%	3Y 5M 23D	6Y 14D
Nippon India Prime Debt Fund Growth	₹63.699 ↓ -0.01	₹9,432	2.4	2.5	5.2	7.2	7.8	7.34%	2Y 11M 12D	3Y 9M 29D
Kotak Corporate Bond Fund Standard Growth	₹4,003.26 ↓ -1.70	₹15,171	2.2	2.3	5.1	7.1	7.8	7.45%	2Y 11M 19D	4Y 9M 14D
Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 28 Aug 26

Research Highlights & Commentary of 5 Funds showcased

Commentary	Aditya Birla Sun Life Corporate Bond Fund	HDFC Corporate Bond Fund	ICICI Prudential Corporate Bond Fund	Nippon India Prime Debt Fund	Kotak Corporate Bond Fund Standard
Point 1	Lower mid AUM (₹23,623 Cr).	Highest AUM (₹30,664 Cr).	Upper mid AUM (₹30,202 Cr).	Bottom quartile AUM (₹9,432 Cr).	Bottom quartile AUM (₹15,171 Cr).
Point 2	Oldest track record among peers (29 yrs).	Established history (16+ yrs).	Established history (17+ yrs).	Established history (25+ yrs).	Established history (18+ yrs).
Point 3	Top rated.	Rating: 5★ (upper mid).	Rating: 4★ (lower mid).	Rating: 4★ (bottom quartile).	Rating: 4★ (bottom quartile).
Point 4	Risk profile: Moderately Low.	Risk profile: Moderately Low.	Risk profile: Moderately Low.	Risk profile: Moderately Low.	Risk profile: Moderately Low.
Point 5	1Y return: 5.13% (lower mid).	1Y return: 4.84% (bottom quartile).	1Y return: 5.94% (top quartile).	1Y return: 5.20% (upper mid).	1Y return: 5.12% (bottom quartile).
Point 6	1M return: -0.06% (bottom quartile).	1M return: -0.18% (bottom quartile).	1M return: 0.15% (top quartile).	1M return: 0.06% (upper mid).	1M return: -0.02% (lower mid).
Point 7	Sharpe: -0.27 (lower mid).	Sharpe: -0.29 (bottom quartile).	Sharpe: 0.12 (top quartile).	Sharpe: -0.27 (bottom quartile).	Sharpe: -0.26 (upper mid).
Point 8	Information ratio: 0.00 (top quartile).	Information ratio: 0.00 (upper mid).	Information ratio: 0.00 (lower mid).	Information ratio: 0.00 (bottom quartile).	Information ratio: 0.00 (bottom quartile).
Point 9	Yield to maturity (debt): 7.34% (lower mid).	Yield to maturity (debt): 7.31% (bottom quartile).	Yield to maturity (debt): 7.35% (upper mid).	Yield to maturity (debt): 7.34% (bottom quartile).	Yield to maturity (debt): 7.45% (top quartile).
Point 10	Modified duration: 4.10 yrs (bottom quartile).	Modified duration: 4.21 yrs (bottom quartile).	Modified duration: 3.48 yrs (lower mid).	Modified duration: 2.95 yrs (top quartile).	Modified duration: 2.97 yrs (upper mid).

Aditya Birla Sun Life Corporate Bond Fund

Lower mid AUM (₹23,623 Cr).
Oldest track record among peers (29 yrs).
Top rated.
Risk profile: Moderately Low.
1Y return: 5.13% (lower mid).
1M return: -0.06% (bottom quartile).
Sharpe: -0.27 (lower mid).
Information ratio: 0.00 (top quartile).
Yield to maturity (debt): 7.34% (lower mid).
Modified duration: 4.10 yrs (bottom quartile).

HDFC Corporate Bond Fund

Highest AUM (₹30,664 Cr).
Established history (16+ yrs).
Rating: 5★ (upper mid).
Risk profile: Moderately Low.
1Y return: 4.84% (bottom quartile).
1M return: -0.18% (bottom quartile).
Sharpe: -0.29 (bottom quartile).
Information ratio: 0.00 (upper mid).
Yield to maturity (debt): 7.31% (bottom quartile).
Modified duration: 4.21 yrs (bottom quartile).

ICICI Prudential Corporate Bond Fund

Upper mid AUM (₹30,202 Cr).
Established history (17+ yrs).
Rating: 4★ (lower mid).
Risk profile: Moderately Low.
1Y return: 5.94% (top quartile).
1M return: 0.15% (top quartile).
Sharpe: 0.12 (top quartile).
Information ratio: 0.00 (lower mid).
Yield to maturity (debt): 7.35% (upper mid).
Modified duration: 3.48 yrs (lower mid).

Nippon India Prime Debt Fund

Bottom quartile AUM (₹9,432 Cr).
Established history (25+ yrs).
Rating: 4★ (bottom quartile).
Risk profile: Moderately Low.
1Y return: 5.20% (upper mid).
1M return: 0.06% (upper mid).
Sharpe: -0.27 (bottom quartile).
Information ratio: 0.00 (bottom quartile).
Yield to maturity (debt): 7.34% (bottom quartile).
Modified duration: 2.95 yrs (top quartile).

Kotak Corporate Bond Fund Standard

Bottom quartile AUM (₹15,171 Cr).
Established history (18+ yrs).
Rating: 4★ (bottom quartile).
Risk profile: Moderately Low.
1Y return: 5.12% (bottom quartile).
1M return: -0.02% (lower mid).
Sharpe: -0.26 (upper mid).
Information ratio: 0.00 (bottom quartile).
Yield to maturity (debt): 7.45% (top quartile).
Modified duration: 2.97 yrs (upper mid).

Top Credit Risk Funds

Credit Risk Funds predominantly invest in corporate bonds rated below the highest rating category. These funds can carry higher credit risk and therefore require careful portfolio evaluation.

Fund	NAV	Net Assets (Cr)	3 MO (%)	6 MO (%)	1 YR (%)	3 YR (%)	2025 (%)	Debt Yield (YTM)	Mod. Duration	Eff. Maturity
SBI Credit Risk Fund Growth	₹49.6917 ↓ -0.02	₹2,181	3.2	4.3	7.8	7.9	7.9	8.38%	2Y 3M 18D	3Y 18D
HDFC Credit Risk Debt Fund Growth	₹26.0286 ↓ -0.01	₹7,666	2.8	3.5	7.2	7.6	8	8.28%	2Y 4M 28D	3Y 7M 10D
Kotak Credit Risk Fund Growth	₹31.8878 ↓ -0.01	₹770	2.7	2.9	7.1	7.6	9.1	8.36%	1Y 9M 11D	2Y 8M 12D
Nippon India Credit Risk Fund Growth	₹38.0102 ↓ -0.01	₹1,556	2.5	3.3	7.1	8.1	8.9	8.54%	1Y 11M 5D	2Y 3M 14D
ICICI Prudential Regular Savings Fund Growth	₹34.793 ↓ 0.00	₹6,320	2.8	3.8	8.2	8.5	9.5	8.35%	2Y 1M 10D	3Y 2M 8D
Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 28 Aug 26

Research Highlights & Commentary of 5 Funds showcased

Commentary	SBI Credit Risk Fund	HDFC Credit Risk Debt Fund	Kotak Credit Risk Fund	Nippon India Credit Risk Fund	ICICI Prudential Regular Savings Fund
Point 1	Lower mid AUM (₹2,181 Cr).	Highest AUM (₹7,666 Cr).	Bottom quartile AUM (₹770 Cr).	Bottom quartile AUM (₹1,556 Cr).	Upper mid AUM (₹6,320 Cr).
Point 2	Oldest track record among peers (22 yrs).	Established history (12+ yrs).	Established history (16+ yrs).	Established history (21+ yrs).	Established history (15+ yrs).
Point 3	Top rated.	Rating: 4★ (upper mid).	Rating: 3★ (lower mid).	Rating: 2★ (bottom quartile).	Rating: 1★ (bottom quartile).
Point 4	Risk profile: Moderate.	Risk profile: Moderate.	Risk profile: Moderately Low.	Risk profile: Moderate.	Risk profile: Moderate.
Point 5	1Y return: 7.78% (upper mid).	1Y return: 7.16% (lower mid).	1Y return: 7.12% (bottom quartile).	1Y return: 7.10% (bottom quartile).	1Y return: 8.19% (top quartile).
Point 6	1M return: 0.77% (top quartile).	1M return: 0.61% (bottom quartile).	1M return: 0.62% (lower mid).	1M return: 0.37% (bottom quartile).	1M return: 0.62% (upper mid).
Point 7	Sharpe: 0.93 (upper mid).	Sharpe: 0.60 (bottom quartile).	Sharpe: 0.55 (bottom quartile).	Sharpe: 0.92 (lower mid).	Sharpe: 1.30 (top quartile).
Point 8	Information ratio: 0.00 (top quartile).	Information ratio: 0.00 (upper mid).	Information ratio: 0.00 (lower mid).	Information ratio: 0.00 (bottom quartile).	Information ratio: 0.00 (bottom quartile).
Point 9	Yield to maturity (debt): 8.38% (upper mid).	Yield to maturity (debt): 8.28% (bottom quartile).	Yield to maturity (debt): 8.36% (lower mid).	Yield to maturity (debt): 8.54% (top quartile).	Yield to maturity (debt): 8.35% (bottom quartile).
Point 10	Modified duration: 2.30 yrs (bottom quartile).	Modified duration: 2.41 yrs (bottom quartile).	Modified duration: 1.78 yrs (top quartile).	Modified duration: 1.93 yrs (upper mid).	Modified duration: 2.11 yrs (lower mid).

SBI Credit Risk Fund

Lower mid AUM (₹2,181 Cr).
Oldest track record among peers (22 yrs).
Top rated.
Risk profile: Moderate.
1Y return: 7.78% (upper mid).
1M return: 0.77% (top quartile).
Sharpe: 0.93 (upper mid).
Information ratio: 0.00 (top quartile).
Yield to maturity (debt): 8.38% (upper mid).
Modified duration: 2.30 yrs (bottom quartile).

HDFC Credit Risk Debt Fund

Highest AUM (₹7,666 Cr).
Established history (12+ yrs).
Rating: 4★ (upper mid).
Risk profile: Moderate.
1Y return: 7.16% (lower mid).
1M return: 0.61% (bottom quartile).
Sharpe: 0.60 (bottom quartile).
Information ratio: 0.00 (upper mid).
Yield to maturity (debt): 8.28% (bottom quartile).
Modified duration: 2.41 yrs (bottom quartile).

Kotak Credit Risk Fund

Bottom quartile AUM (₹770 Cr).
Established history (16+ yrs).
Rating: 3★ (lower mid).
Risk profile: Moderately Low.
1Y return: 7.12% (bottom quartile).
1M return: 0.62% (lower mid).
Sharpe: 0.55 (bottom quartile).
Information ratio: 0.00 (lower mid).
Yield to maturity (debt): 8.36% (lower mid).
Modified duration: 1.78 yrs (top quartile).

Nippon India Credit Risk Fund

Bottom quartile AUM (₹1,556 Cr).
Established history (21+ yrs).
Rating: 2★ (bottom quartile).
Risk profile: Moderate.
1Y return: 7.10% (bottom quartile).
1M return: 0.37% (bottom quartile).
Sharpe: 0.92 (lower mid).
Information ratio: 0.00 (bottom quartile).
Yield to maturity (debt): 8.54% (top quartile).
Modified duration: 1.93 yrs (upper mid).

ICICI Prudential Regular Savings Fund

Upper mid AUM (₹6,320 Cr).
Established history (15+ yrs).
Rating: 1★ (bottom quartile).
Risk profile: Moderate.
1Y return: 8.19% (top quartile).
1M return: 0.62% (upper mid).
Sharpe: 1.30 (top quartile).
Information ratio: 0.00 (bottom quartile).
Yield to maturity (debt): 8.35% (bottom quartile).
Modified duration: 2.11 yrs (lower mid).

Top Banking and PSU Debt Funds

Banking and PSU Debt Funds predominantly invest in debt securities issued by banks, public sector undertakings and public financial institutions.

Fund	NAV	Net Assets (Cr)	3 MO (%)	6 MO (%)	1 YR (%)	3 YR (%)	2025 (%)	Debt Yield (YTM)	Mod. Duration	Eff. Maturity
UTI Banking & PSU Debt Fund Growth	₹23.4725 ↑ 0.00	₹1,483	2.2	3	5.8	7.1	7.8	6.9%	8M 5D	8M 16D
HDFC Banking and PSU Debt Fund Growth	₹24.3437 ↓ -0.02	₹5,209	2.3	2.3	5	6.8	7.5	7.18%	2Y 11M 26D	4Y 18D
ICICI Prudential Banking and PSU Debt Fund Growth	₹34.8312 ↓ -0.02	₹8,850	2.3	2.5	5.5	7	7.6	7.3%	3Y 4M 20D	6Y 1M 20D
Kotak Banking and PSU Debt fund Growth	₹69.4181 ↓ -0.02	₹4,991	2.2	2.3	5.3	7	7.7	7.22%	3Y 4M 17D	4Y 8M 8D
Aditya Birla Sun Life Banking & PSU Debt Fund Growth	₹387.361 ↓ -0.17	₹8,833	2.1	2.2	4.9	6.7	7.3	7.22%	3Y 18D	4Y 4M 28D
Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 28 Aug 26

Research Highlights & Commentary of 5 Funds showcased

Commentary	UTI Banking & PSU Debt Fund	HDFC Banking and PSU Debt Fund	ICICI Prudential Banking and PSU Debt Fund	Kotak Banking and PSU Debt fund	Aditya Birla Sun Life Banking & PSU Debt Fund
Point 1	Bottom quartile AUM (₹1,483 Cr).	Lower mid AUM (₹5,209 Cr).	Highest AUM (₹8,850 Cr).	Bottom quartile AUM (₹4,991 Cr).	Upper mid AUM (₹8,833 Cr).
Point 2	Established history (12+ yrs).	Established history (12+ yrs).	Established history (16+ yrs).	Oldest track record among peers (27 yrs).	Established history (18+ yrs).
Point 3	Top rated.	Rating: 5★ (upper mid).	Rating: 4★ (lower mid).	Rating: 4★ (bottom quartile).	Rating: 4★ (bottom quartile).
Point 4	Risk profile: Moderate.	Risk profile: Moderately Low.	Risk profile: Moderate.	Risk profile: Moderately Low.	Risk profile: Moderate.
Point 5	1Y return: 5.82% (top quartile).	1Y return: 4.97% (bottom quartile).	1Y return: 5.49% (upper mid).	1Y return: 5.35% (lower mid).	1Y return: 4.87% (bottom quartile).
Point 6	1M return: 0.53% (top quartile).	1M return: -0.09% (bottom quartile).	1M return: 0.10% (upper mid).	1M return: -0.15% (bottom quartile).	1M return: -0.02% (lower mid).
Point 7	Sharpe: -0.04 (top quartile).	Sharpe: -0.26 (bottom quartile).	Sharpe: -0.11 (lower mid).	Sharpe: -0.10 (upper mid).	Sharpe: -0.41 (bottom quartile).
Point 8	Information ratio: 0.00 (top quartile).	Information ratio: 0.00 (upper mid).	Information ratio: 0.00 (lower mid).	Information ratio: 0.00 (bottom quartile).	Information ratio: 0.00 (bottom quartile).
Point 9	Yield to maturity (debt): 6.90% (bottom quartile).	Yield to maturity (debt): 7.18% (bottom quartile).	Yield to maturity (debt): 7.30% (top quartile).	Yield to maturity (debt): 7.22% (upper mid).	Yield to maturity (debt): 7.22% (lower mid).
Point 10	Modified duration: 0.68 yrs (top quartile).	Modified duration: 2.99 yrs (upper mid).	Modified duration: 3.39 yrs (bottom quartile).	Modified duration: 3.38 yrs (bottom quartile).	Modified duration: 3.05 yrs (lower mid).

UTI Banking & PSU Debt Fund

Bottom quartile AUM (₹1,483 Cr).
Established history (12+ yrs).
Top rated.
Risk profile: Moderate.
1Y return: 5.82% (top quartile).
1M return: 0.53% (top quartile).
Sharpe: -0.04 (top quartile).
Information ratio: 0.00 (top quartile).
Yield to maturity (debt): 6.90% (bottom quartile).
Modified duration: 0.68 yrs (top quartile).

HDFC Banking and PSU Debt Fund

Lower mid AUM (₹5,209 Cr).
Established history (12+ yrs).
Rating: 5★ (upper mid).
Risk profile: Moderately Low.
1Y return: 4.97% (bottom quartile).
1M return: -0.09% (bottom quartile).
Sharpe: -0.26 (bottom quartile).
Information ratio: 0.00 (upper mid).
Yield to maturity (debt): 7.18% (bottom quartile).
Modified duration: 2.99 yrs (upper mid).

ICICI Prudential Banking and PSU Debt Fund

Highest AUM (₹8,850 Cr).
Established history (16+ yrs).
Rating: 4★ (lower mid).
Risk profile: Moderate.
1Y return: 5.49% (upper mid).
1M return: 0.10% (upper mid).
Sharpe: -0.11 (lower mid).
Information ratio: 0.00 (lower mid).
Yield to maturity (debt): 7.30% (top quartile).
Modified duration: 3.39 yrs (bottom quartile).

Kotak Banking and PSU Debt fund

Bottom quartile AUM (₹4,991 Cr).
Oldest track record among peers (27 yrs).
Rating: 4★ (bottom quartile).
Risk profile: Moderately Low.
1Y return: 5.35% (lower mid).
1M return: -0.15% (bottom quartile).
Sharpe: -0.10 (upper mid).
Information ratio: 0.00 (bottom quartile).
Yield to maturity (debt): 7.22% (upper mid).
Modified duration: 3.38 yrs (bottom quartile).

Aditya Birla Sun Life Banking & PSU Debt Fund

Upper mid AUM (₹8,833 Cr).
Established history (18+ yrs).
Rating: 4★ (bottom quartile).
Risk profile: Moderate.
1Y return: 4.87% (bottom quartile).
1M return: -0.02% (lower mid).
Sharpe: -0.41 (bottom quartile).
Information ratio: 0.00 (bottom quartile).
Yield to maturity (debt): 7.22% (lower mid).
Modified duration: 3.05 yrs (lower mid).

Top Gilt Funds

Gilt Funds predominantly invest in government securities across different maturities. They generally have lower credit risk but can be sensitive to changes in interest rates.

Fund	NAV	Net Assets (Cr)	3 MO (%)	6 MO (%)	1 YR (%)	3 YR (%)	2025 (%)	Debt Yield (YTM)	Mod. Duration	Eff. Maturity
ICICI Prudential Gilt Fund Growth	₹108.392 ↓ -0.09	₹8,890	3.2	2.6	5.5	6.9	6.8	7.47%	9Y 5M 12D	21Y 5M 1D
SBI Magnum Gilt Fund Growth	₹68.3289 ↓ -0.02	₹8,306	1.9	2	4.7	6.2	4.5	7.12%	8Y 1M 20D	23Y 5M 1D
SBI Magnum Constant Maturity Fund Growth	₹66.5539 ↓ -0.11	₹1,637	2.4	1.7	4.6	6.9	6.7	6.95%	6Y 9M 7D	9Y 6M
Nippon India Gilt Securities Fund Growth	₹39.0983 ↓ -0.04	₹1,552	3	2.2	4.5	5.8	3.7	7.31%	9Y 9M	23Y 8M 5D
Aditya Birla Sun Life Government Securities Fund Growth	₹81.9448 ↓ -0.10	₹1,410	2.8	1.3	3.4	5.2	3	7.49%	11Y 7M 20D	33Y 6M 18D
Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 28 Aug 26

Research Highlights & Commentary of 5 Funds showcased

Commentary	ICICI Prudential Gilt Fund	SBI Magnum Gilt Fund	SBI Magnum Constant Maturity Fund	Nippon India Gilt Securities Fund	Aditya Birla Sun Life Government Securities Fund
Point 1	Highest AUM (₹8,890 Cr).	Upper mid AUM (₹8,306 Cr).	Lower mid AUM (₹1,637 Cr).	Bottom quartile AUM (₹1,552 Cr).	Bottom quartile AUM (₹1,410 Cr).
Point 2	Oldest track record among peers (27 yrs).	Established history (25+ yrs).	Established history (25+ yrs).	Established history (18+ yrs).	Established history (26+ yrs).
Point 3	Top rated.	Rating: 4★ (upper mid).	Rating: 4★ (lower mid).	Rating: 4★ (bottom quartile).	Rating: 4★ (bottom quartile).
Point 4	Risk profile: Moderate.	Risk profile: Moderate.	Risk profile: Moderately Low.	Risk profile: Moderate.	Risk profile: Moderate.
Point 5	1Y return: 5.54% (top quartile).	1Y return: 4.69% (upper mid).	1Y return: 4.58% (lower mid).	1Y return: 4.53% (bottom quartile).	1Y return: 3.35% (bottom quartile).
Point 6	1M return: 0.05% (top quartile).	1M return: -0.06% (upper mid).	1M return: -0.35% (bottom quartile).	1M return: -0.14% (lower mid).	1M return: -0.24% (bottom quartile).
Point 7	Sharpe: -0.29 (top quartile).	Sharpe: -0.64 (bottom quartile).	Sharpe: -0.45 (upper mid).	Sharpe: -0.56 (lower mid).	Sharpe: -0.67 (bottom quartile).
Point 8	Information ratio: 0.00 (top quartile).	Information ratio: 0.00 (upper mid).	Information ratio: 0.00 (lower mid).	Information ratio: 0.00 (bottom quartile).	Information ratio: 0.00 (bottom quartile).
Point 9	Yield to maturity (debt): 7.47% (upper mid).	Yield to maturity (debt): 7.12% (bottom quartile).	Yield to maturity (debt): 6.95% (bottom quartile).	Yield to maturity (debt): 7.31% (lower mid).	Yield to maturity (debt): 7.49% (top quartile).
Point 10	Modified duration: 9.45 yrs (lower mid).	Modified duration: 8.14 yrs (upper mid).	Modified duration: 6.77 yrs (top quartile).	Modified duration: 9.75 yrs (bottom quartile).	Modified duration: 11.64 yrs (bottom quartile).

ICICI Prudential Gilt Fund

Highest AUM (₹8,890 Cr).
Oldest track record among peers (27 yrs).
Top rated.
Risk profile: Moderate.
1Y return: 5.54% (top quartile).
1M return: 0.05% (top quartile).
Sharpe: -0.29 (top quartile).
Information ratio: 0.00 (top quartile).
Yield to maturity (debt): 7.47% (upper mid).
Modified duration: 9.45 yrs (lower mid).

SBI Magnum Gilt Fund

Upper mid AUM (₹8,306 Cr).
Established history (25+ yrs).
Rating: 4★ (upper mid).
Risk profile: Moderate.
1Y return: 4.69% (upper mid).
1M return: -0.06% (upper mid).
Sharpe: -0.64 (bottom quartile).
Information ratio: 0.00 (upper mid).
Yield to maturity (debt): 7.12% (bottom quartile).
Modified duration: 8.14 yrs (upper mid).

SBI Magnum Constant Maturity Fund

Lower mid AUM (₹1,637 Cr).
Established history (25+ yrs).
Rating: 4★ (lower mid).
Risk profile: Moderately Low.
1Y return: 4.58% (lower mid).
1M return: -0.35% (bottom quartile).
Sharpe: -0.45 (upper mid).
Information ratio: 0.00 (lower mid).
Yield to maturity (debt): 6.95% (bottom quartile).
Modified duration: 6.77 yrs (top quartile).

Nippon India Gilt Securities Fund

Bottom quartile AUM (₹1,552 Cr).
Established history (18+ yrs).
Rating: 4★ (bottom quartile).
Risk profile: Moderate.
1Y return: 4.53% (bottom quartile).
1M return: -0.14% (lower mid).
Sharpe: -0.56 (lower mid).
Information ratio: 0.00 (bottom quartile).
Yield to maturity (debt): 7.31% (lower mid).
Modified duration: 9.75 yrs (bottom quartile).

Aditya Birla Sun Life Government Securities Fund

Bottom quartile AUM (₹1,410 Cr).
Established history (26+ yrs).
Rating: 4★ (bottom quartile).
Risk profile: Moderate.
1Y return: 3.35% (bottom quartile).
1M return: -0.24% (bottom quartile).
Sharpe: -0.67 (bottom quartile).
Information ratio: 0.00 (bottom quartile).
Yield to maturity (debt): 7.49% (top quartile).
Modified duration: 11.64 yrs (bottom quartile).

Top Floating Rate Funds

Floater Funds predominantly invest in floating-rate instruments, where the interest rate on the underlying securities can reset periodically.

Fund	NAV	Net Assets (Cr)	3 MO (%)	6 MO (%)	1 YR (%)	3 YR (%)	2025 (%)	Debt Yield (YTM)	Mod. Duration	Eff. Maturity
Aditya Birla Sun Life Floating Rate Fund - Long Term Growth	₹372.951 ↑ 0.04	₹13,215	2.1	2.9	6	7.2	7.7	7.21%	10M 28D	1Y 8M 26D
ICICI Prudential Floating Interest Fund Growth	₹455.698 ↓ -0.04	₹8,464	2.2	2.9	6.1	7.3	7.7	7.33%	1Y 11M 5D	2Y 11M 19D
Nippon India Floating Rate Fund Growth	₹48.1773 ↓ -0.02	₹7,501	2.2	2.5	5.5	7.2	7.9	7.36%	2Y 4M 17D	2Y 11M 8D
Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 28 Aug 26

Research Highlights & Commentary of 3 Funds showcased

Commentary	Aditya Birla Sun Life Floating Rate Fund - Long Term	ICICI Prudential Floating Interest Fund	Nippon India Floating Rate Fund
Point 1	Highest AUM (₹13,215 Cr).	Lower mid AUM (₹8,464 Cr).	Bottom quartile AUM (₹7,501 Cr).
Point 2	Established history (17+ yrs).	Established history (20+ yrs).	Oldest track record among peers (22 yrs).
Point 3	Top rated.	Rating: 3★ (lower mid).	Rating: 3★ (bottom quartile).
Point 4	Risk profile: Moderately Low.	Risk profile: Moderate.	Risk profile: Moderately Low.
Point 5	1Y return: 5.96% (lower mid).	1Y return: 6.12% (upper mid).	1Y return: 5.46% (bottom quartile).
Point 6	1M return: 0.37% (upper mid).	1M return: 0.29% (lower mid).	1M return: 0.11% (bottom quartile).
Point 7	Sharpe: 0.31 (lower mid).	Sharpe: 0.45 (upper mid).	Sharpe: -0.08 (bottom quartile).
Point 8	Information ratio: 0.00 (upper mid).	Information ratio: 0.00 (lower mid).	Information ratio: 0.00 (bottom quartile).
Point 9	Yield to maturity (debt): 7.21% (bottom quartile).	Yield to maturity (debt): 7.33% (lower mid).	Yield to maturity (debt): 7.36% (upper mid).
Point 10	Modified duration: 0.91 yrs (upper mid).	Modified duration: 1.93 yrs (lower mid).	Modified duration: 2.38 yrs (bottom quartile).

Aditya Birla Sun Life Floating Rate Fund - Long Term

Highest AUM (₹13,215 Cr).
Established history (17+ yrs).
Top rated.
Risk profile: Moderately Low.
1Y return: 5.96% (lower mid).
1M return: 0.37% (upper mid).
Sharpe: 0.31 (lower mid).
Information ratio: 0.00 (upper mid).
Yield to maturity (debt): 7.21% (bottom quartile).
Modified duration: 0.91 yrs (upper mid).

ICICI Prudential Floating Interest Fund

Lower mid AUM (₹8,464 Cr).
Established history (20+ yrs).
Rating: 3★ (lower mid).
Risk profile: Moderate.
1Y return: 6.12% (upper mid).
1M return: 0.29% (lower mid).
Sharpe: 0.45 (upper mid).
Information ratio: 0.00 (lower mid).
Yield to maturity (debt): 7.33% (lower mid).
Modified duration: 1.93 yrs (lower mid).

Nippon India Floating Rate Fund

Bottom quartile AUM (₹7,501 Cr).
Oldest track record among peers (22 yrs).
Rating: 3★ (bottom quartile).
Risk profile: Moderately Low.
1Y return: 5.46% (bottom quartile).
1M return: 0.11% (bottom quartile).
Sharpe: -0.08 (bottom quartile).
Information ratio: 0.00 (bottom quartile).
Yield to maturity (debt): 7.36% (upper mid).
Modified duration: 2.38 yrs (bottom quartile).

Debt Mutual Fund Taxation

Taxation is an important factor to consider before investing in debt mutual funds. The applicable tax treatment depends on the type of mutual fund, the date of investment and the prevailing income-tax rules.

a. Taxation of Specified Mutual Funds

Under Section 50AA of the Income-tax Act, gains from a Specified Mutual Fund are treated as short-term Capital Gains, irrespective of how long the investment is held. From AY 2026–27, a specified mutual fund generally includes a mutual fund that invests more than 65% of its total proceeds in debt and money market instruments, or a fund that invests 65% or more of its total proceeds in units of such a fund, subject to the conditions specified under the law.

Such gains are taxed at the applicable rate of tax for the investor. There is no separate 20% long-term capital gains rate or indexation benefit for gains covered under Section 50AA.

b. What About Other Mutual Funds?

Not every mutual fund is necessarily covered by Section 50AA. The tax treatment can differ depending on the scheme's classification and the applicable provisions of the Income-tax Act.

Therefore, investors should check the tax treatment applicable to the specific scheme and the date of investment before making an investment or redemption decision.

Investment	Tax Treatment
Specified Mutual Fund covered under Section 50AA	Gains treated as short-term capital gains irrespective of holding period and taxed at the applicable tax rate
Other mutual funds	Tax treatment depends on the scheme's classification, holding period and applicable tax rules

📌 Note: Tax rules are subject to change. Before investing or redeeming units, check the latest applicable tax provisions or consult a qualified tax professional for your individual situation.

Debt Mutual Funds vs Fixed Deposits

Debt mutual funds and fixed deposits can both be considered for relatively conservative investment needs, but they work differently.

Factor	Debt Mutual Funds	Fixed Deposits
Returns	Market-linked and not guaranteed	Interest rate is generally fixed at the time of booking
Capital value	Can fluctuate with market conditions	Principal does not fluctuate with market NAV movements
Interest-rate impact	Depends on the fund's portfolio and duration	No daily market-value fluctuation for the depositor
Liquidity	Most open-ended funds allow redemption, subject to scheme terms	Premature withdrawal may be subject to Bank rules and penalties
Risk	Depends on credit, interest-rate and liquidity risks	Depends on the bank and deposit structure
Taxation	Depends on the applicable tax rules and scheme classification	Interest is generally taxable as per applicable rules

A debt mutual fund may offer greater flexibility across investment horizons and debt-market exposure, while an FD provides a predetermined interest rate. The better option depends on your investment objective, liquidity needs, tax situation and risk tolerance.

How to Evaluate the Best Debt Mutual Funds

In order to select the best debt funds for your investment needs, it is important to look beyond past returns. Parameters such as average maturity, duration, interest-rate sensitivity, credit quality, YTM, AUM, expense ratio and taxation can help you understand the fund better.

Let's have an in-depth look at some of the important factors:

1. Investment Horizon

Before investing in a debt mutual fund, it is important to consider your investment horizon. The time for which you plan to stay invested should broadly match the fund's portfolio maturity and duration.

For example, if you need the money in the short term, a fund with a shorter duration may be more suitable, as it generally carries lower interest-rate sensitivity. For a longer investment horizon, investors may consider funds with higher duration depending on their risk appetite and Financial goals.

Matching your investment horizon with the appropriate debt fund category can help you avoid taking unnecessary interest-rate risk.

2. Average Maturity/Duration

Average maturity is an essential parameter in debt funds that is sometimes overlooked by investors, who tend to invest for a long period without considering the risks involved. Investors need to decide their debt fund investment based on their investment horizon. Matching the time period of investment with the maturity and duration of the debt fund can help avoid taking unnecessary interest-rate risk.

Average maturity indicates the average time taken for the securities in a fund's portfolio to mature. Duration is a related but different measure that indicates how sensitive the portfolio may be to changes in interest rates. Generally, funds with higher duration are more sensitive to interest-rate movements.

Therefore, it is advisable to check the average maturity and duration of a debt fund before investing. For example, Liquid Funds invest in debt and money market securities with a maturity of up to 91 days and may be considered for short-term needs. Similarly, if you are looking at an investment horizon of around one to three years, a Short Duration Fund may be considered, depending on your risk profile and financial goal.

3. Interest Rate Scenario

Understanding the market environment is very important when investing in debt funds, as they are affected by changes in interest rates. When interest rates rise, bond prices generally fall and vice versa. When interest rates rise, newly issued bonds may offer higher yields than existing bonds, which can reduce the attractiveness and market value of older bonds.

If a debt fund has significant exposure to such existing bonds, a rise in interest rates can negatively impact the NAV of the fund. The impact is generally greater for funds with longer duration because their portfolios are more sensitive to interest-rate movements.

For instance, long-duration debt funds may experience greater volatility during periods of rising interest rates. Investors who have a shorter investment horizon may therefore prefer funds with lower duration, depending on their risk profile and investment objective.

Interest-rate movements can also create opportunities for investors who understand the interest-rate cycle. During periods of falling interest rates, longer-duration debt funds may benefit from an increase in bond prices. However, trying to predict interest-rate movements should not be the only basis for selecting a debt fund. Investors should also consider their investment horizon, portfolio quality and risk tolerance.

4. Current Yield or Portfolio Yield

The yield is a measure of the interest income generated by the bonds and other debt securities in a portfolio. The Yield to Maturity (YTM) of a debt mutual fund indicates the annualised yield of the securities in the portfolio based on certain assumptions.

When comparing debt funds on the basis of YTM, investors should also look at how the additional yield is being generated. Is it coming from higher credit risk or exposure to lower-rated securities? A higher YTM does not automatically mean that a fund is better.

Investing in lower-quality instruments can carry additional risks, including the possibility of a downgrade or default. Therefore, it is important to look at the portfolio yield along with the credit quality and overall risk of the portfolio.

5. Credit Quality of Portfolio

In order to select the best debt funds, checking the credit quality of the bonds and debt securities is an essential parameter. Bonds and other debt instruments are assigned credit ratings by rating agencies based on the issuer's ability to meet its financial obligations.

Higher-rated securities generally indicate stronger credit quality, while lower-rated securities may carry greater credit risk. However, a credit rating is not a guarantee against default or loss.

If credit quality is a priority, investors may prefer funds with relatively higher-quality portfolios. However, credit quality should always be considered along with the fund's duration, portfolio concentration, YTM and overall investment strategy.

6. Assets Under Management (AUM)

AUM is the total value of assets managed by a mutual fund scheme. It provides an indication of the size and scale of the fund.

A higher AUM does not automatically make a debt fund better or safer. Investors should consider AUM along with other factors such as portfolio quality, liquidity, performance consistency, expense ratio and risk.

It is also important to look at the fund's exposure to individual issuers and sectors rather than judging the fund solely by the size of its AUM.

7. Expense Ratio

An important factor to consider when investing in debt funds is the expense ratio. A higher expense ratio can reduce the returns available to investors, making it important to compare costs when evaluating similar funds.

Instead of relying on a fixed expense-ratio range, investors should check the current expense ratio of the scheme and compare it with other funds in the same category.

The plan type should also be considered. Direct Plans generally have lower expenses than Regular Plans because they do not include distributor commissions.

8. Taxation Impacts

Taxation is another important factor to consider before investing in debt mutual funds. The applicable tax treatment depends on the scheme's classification, the date of investment and the prevailing tax rules.

For specified mutual funds covered under Section 50AA, gains are treated as short-term capital gains irrespective of the holding period and are taxed at the applicable rate. From AY 2026–27, a specified mutual fund includes a mutual fund that invests more than 65% of its total proceeds in debt and money market instruments, subject to the conditions specified under the law.

Therefore, the earlier rule that debt-fund investments held for more than three years automatically qualified for 20% long-term capital gains tax with indexation should not be presented as a general rule for current debt mutual fund investments.

Investors should check the applicable tax treatment for the specific scheme and their individual tax situation before investing.

Things to Consider Before Investing in Debt Mutual Funds

Before investing in a debt mutual fund, look beyond past returns. A few important factors can help you understand whether a fund is suitable for your needs.

1. Match the Fund to Your Goal

Start with your financial goal and the time available to achieve it. Avoid choosing a long-duration fund simply because it has delivered strong recent returns if you need the money in the near term.

2. Understand the Portfolio

Check where the fund invests your money. Look at the types of securities, credit ratings, issuer concentration and portfolio maturity before investing.

3. Check the Risk

Debt funds can carry credit, interest-rate and liquidity risks. The level of risk varies significantly across categories, so make sure the fund's risk profile matches your comfort level.

4. Compare Similar Funds

Compare funds within the same category rather than comparing a liquid fund with a gilt fund. Look at consistency, portfolio quality, duration, YTM, expense ratio and other relevant parameters.

5. Check the Exit Load

Some debt funds may charge an exit load if you redeem within a specified period. Check the scheme's current exit-load structure before investing, particularly if you may need the money soon.

6. Consider Direct vs Regular Plans

Direct and Regular Plans invest in the same scheme but have different expense structures. Direct Plans generally have lower expenses because they do not include distributor commissions.

7. Do Not Chase the Highest YTM

A higher YTM can look attractive, but it may also indicate that the portfolio is taking greater credit or interest-rate risk. Always understand how the fund generates its yield before making a decision.

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Frequently Asked Questions About Debt Mutual Funds

1. Are debt mutual funds safe?

A: Debt mutual funds are not risk-free. Their NAV can fluctuate due to changes in interest rates, credit quality, liquidity and market conditions. The level of risk varies across debt fund categories.

2. Can debt mutual funds lose money?

A: Yes. A debt fund can generate negative returns over a period, particularly when interest rates move sharply or when securities in the portfolio face credit or liquidity issues.

3. Which debt fund is best for short-term investment?

A: For short-term investments, categories such as Overnight, Liquid, Ultra Short Duration and Money Market Funds may be considered depending on how soon you need the money and your risk profile.

4. Are debt mutual funds better than fixed deposits?

A: Not necessarily. Debt funds offer market-linked returns and greater exposure to the debt market, while fixed deposits generally offer a predetermined interest rate. The suitable option depends on your investment goal, liquidity requirements, tax situation and risk tolerance.

5. Is a higher YTM better in a debt fund?

A: Not always. A higher YTM may come with higher credit or interest-rate risk. YTM should therefore be considered along with the portfolio's credit quality, duration and overall risk.

6 Can I withdraw money from a debt mutual fund anytime?

A: Most open-ended debt funds allow investors to redeem their units, subject to the scheme's terms, applicable exit load and market value at the time of redemption.

7. Are gilt funds completely risk-free?

A: No. Gilt funds primarily invest in government securities and generally have low credit risk, but they can still experience significant NAV fluctuations because of interest-rate risk, particularly when the portfolio has a longer duration.

8. How are debt mutual funds taxed?

A: Taxation depends on the scheme's classification and the applicable tax rules. Certain debt-oriented mutual funds covered under Section 50AA are treated as specified mutual funds, with gains taxed as short-term capital gains irrespective of the holding period.

Conclusion

Debt mutual funds can be a useful part of an investment portfolio, particularly when you want to invest in fixed-income securities or have a specific short- or medium-term financial goal.

However, choosing a debt fund should go beyond looking at past returns. Consider your investment horizon, the fund's credit quality, duration, portfolio composition, YTM, expenses and risk before investing.

The best debt fund is ultimately the one that fits your financial goal, time horizon and risk appetite.

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.