Table of Contents
- Why To Invest in Debt Mutual Funds?
- Risks in Debt Mutual Funds
- Debt Mutual Fund Taxation
- Best Debt Mutual Funds in India for Investments FY 24 - 25
- Top 5 Liquid Mutual Funds
- Top 5 Ultra Short Term Bond Mutual Funds
- Top and Best Floating Rate Mutual Funds
- Top 5 Best Money Market Mutual Funds
- Top 5 Short Term Bond Mutual Funds
- Top 5 Medium to Long Term Bond Mutual Funds
- Top 5 Banking and PSU Debt Mutual Funds
- Top 5 Credit Risk Mutual Funds
- Top 5 Dynamic Bond Mutual Funds
- Top 5 Corporate Bond Mutual Funds
- Top 5 Gilt Mutual Funds
- How to Evaluate Best Debt Mutual Funds
- Things to consider as an investor
- How to Invest in Best Debt Funds Online?
- Conclusion
Top 5 Funds
Best Debt Mutual Funds 2024
Best debt funds vary according to the tenor of investment of the investor. Investors need to be clear on their time horizon of investment when selecting the best Debt fund for their investment and also factor in the interest rate scenario.
For investors with a very short holding period, say for a couple of days to a month, Liquid Funds and ultra-short term funds may be relevant. When the time horizon is one to two years then short-term funds may be the desired vehicle. For longer tenors, for more than 3 years, long-term debt funds are the most preferred instruments by investors, especially during falling interest rates. Above all, debt funds have proved to be less risky than equities when looking for short-term investments, however, the volatility of long-term income funds may match that of equities.
As debt funds invest in fixed income instruments like government securities, treasury bills, corporate Bonds, etc., they have the capacity of generating consistent and regular returns over time. However, there are many qualitative and quantitative factors that one needs understand before selecting the best debt funds to invest, viz - AUM, Average Maturity, Taxation, the credit quality of the portfolio, etc. Below we have listed the top 5 best debt funds to invest across the various categories of debt funds - Best Liquid Funds, best ultra short-term funds, best short-term funds, best long-term funds and best Gilt Funds to invest in 2024 - 2025.
Why To Invest in Debt Mutual Funds?
Debt funds are considered to be an ideal investment for generating regular income. For example, choosing dividend payout can be an option for regular income.
In debt funds, investors can withdraw required money from the investment at any point in time and can let the remaining money stay invested.
Since debt funds largely invest in government securities, corporate debt and other securities like treasury bills, etc., they are not affected by equity market volatility.
If an investor is planning to achieve short-term Financial goals or invest for short periods then debt funds can be a good option. Liquid funds, ultra short-term funds, and short-term income funds may be the desired options.
In debt funds, investors can generate fixed income every month by starting a Systematic Withdrawal Plan (SWP is a reverse of SIP / STP) to withdraw a fixed amount on a monthly basis. Also, you can change the amount of the SWP when required.
Risks in Debt Mutual Funds
While Investing in debt funds, investors should be cautious about two major risks associated with them- credit risk and interest risk.
Credit Risk
A credit risk arises when a company that has issued the debt instruments does not make regular payments. In such cases, it has a major impact on the fund, depending on how much portion the fund has in the portfolio. Hence, it is suggested to be in debt instruments with a rating higher credit rating. An AAA rating is considered to be the highest quality with little or negligible payment Default Risk.
Interest Risks
The interest rate risk refers to a change in the bond price due to the change in the prevailing interest rate. When the interest rate rise in the economy the bond prices fall down and vice versa. The higher the maturity of the funds’ portfolio, the more prone it is to the interest rate risk. So in a rising interest rate scenario, it is advisable to go for lower maturity debt funds. And the reverse in a falling interest rate scenario.
Debt Mutual Fund Taxation
Tax implication on debt funds is computed in the following manner-
a. Short Term Capital Gains
If the holding period of a debt investment is less than 36 months, then it is classified as a short-term investment and these are taxed as per individual's tax slab.
b. Long Term Capital Gains
If the holding period of debt investment is more than 36 months, then it is classified as a long-term investment and is taxed at 20% with an indexation benefit.
| Capital Gains | Investment Holding Gains | Taxation |
|---|---|---|
| Short Term Capital Gains | Less than 36 months | As per individual's tax slab |
| Long Term Capital Gains | More than 36 months | 20% with indexation benefits |
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Best Debt Mutual Funds in India for Investments FY 24 - 25
Top 5 Liquid Mutual Funds
Top Liquid funds with AUM/Net Assets > 10,000 Crore.
Fund NAV Net Assets (Cr) Min Investment 1 MO (%) 3 MO (%) 6 MO (%) 1 YR (%) 2023 (%) Debt Yield (YTM) Mod. Duration Eff. Maturity Axis Liquid Fund Growth ₹2,677.62
↑ 0.51 ₹22,169 500 0.7 1.9 3.7 7.3 7.1 7.41% 1M 13D 1M 14D Aditya Birla Sun Life Liquid Fund Growth ₹387.615
↑ 0.07 ₹29,764 5,000 0.7 1.9 3.7 7.2 7.1 7.47% 1M 17D 1M 17D ICICI Prudential Liquid Fund Growth ₹356.184
↑ 0.07 ₹35,428 500 0.7 1.9 3.7 7.2 7 7.49% 1M 11D 1M 15D Tata Liquid Fund Growth ₹3,789.28
↑ 0.70 ₹17,463 5,000 0.7 1.9 3.7 7.2 7 7.37% 1M 9D 1M 9D Nippon India Liquid Fund Growth ₹5,873.03
↑ 1.10 ₹25,253 100 0.7 1.9 3.7 7.2 7 7.48% 1M 8D 1M 12D Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 23 Apr 24
Top 5 Ultra Short Term Bond Mutual Funds
Top Ultra Short Bond funds with AUM/Net Assets > 1,000 Crore.
Fund NAV Net Assets (Cr) Min Investment 3 MO (%) 6 MO (%) 1 YR (%) 3 YR (%) 2023 (%) Debt Yield (YTM) Mod. Duration Eff. Maturity Aditya Birla Sun Life Savings Fund Growth ₹501.391
↑ 0.06 ₹10,748 1,000 2.1 3.8 7.5 5.8 7.2 7.95% 5M 12D 6M 4D UTI Ultra Short Term Fund Growth ₹3,904.52
↑ 0.86 ₹2,093 5,000 1.9 3.6 7 6.1 6.7 7.91% 6M 1D 6M 13D ICICI Prudential Ultra Short Term Fund Growth ₹25.445
↑ 0.01 ₹12,180 5,000 2 3.7 7.3 5.6 6.9 8.02% 4M 24D 5M 8D SBI Magnum Ultra Short Duration Fund Growth ₹5,488.45
↑ 1.09 ₹9,018 5,000 1.9 3.7 7.2 5.4 7 7.68% 4M 28D 5M 8D Kotak Savings Fund Growth ₹39.4669
↑ 0.01 ₹12,372 5,000 1.9 3.6 7 5.3 6.8 7.8% 6M 4D 8M 8D Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 23 Apr 24
Top and Best Floating Rate Mutual Funds
Fund NAV Net Assets (Cr) Min Investment 3 MO (%) 6 MO (%) 1 YR (%) 3 YR (%) 2023 (%) Debt Yield (YTM) Mod. Duration Eff. Maturity Aditya Birla Sun Life Floating Rate Fund - Long Term Growth ₹317.098
↑ 0.10 ₹11,409 1,000 2.1 3.9 7.6 5.9 7.5 7.93% 1Y 25D 2Y 7M 2D ICICI Prudential Floating Interest Fund Growth ₹386.855
↑ 0.34 ₹9,927 5,000 2.2 3.8 8.2 6 7.7 8.35% 1Y 2M 1D 7Y 1M 6D Nippon India Floating Rate Fund Growth ₹40.8907
↑ 0.01 ₹7,943 5,000 2 3.7 7.3 5.5 7.2 7.91% 2Y 5M 23D 3Y 3M 18D Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 23 Apr 24
Top 5 Best Money Market Mutual Funds
Fund NAV Net Assets (Cr) Min Investment 3 MO (%) 6 MO (%) 1 YR (%) 3 YR (%) 2023 (%) Debt Yield (YTM) Mod. Duration Eff. Maturity Aditya Birla Sun Life Money Manager Fund Growth ₹338.715
↑ 0.10 ₹18,375 1,000 2.1 3.9 7.6 5.8 7.4 7.93% 9M 22D 9M 25D UTI Money Market Fund Growth ₹2,821.27
↑ 0.86 ₹11,680 10,000 2 3.9 7.6 5.8 7.4 7.71% 9M 9D 9M 9D ICICI Prudential Money Market Fund Growth ₹347.31
↑ 0.12 ₹15,509 500 2.1 3.9 7.6 5.7 7.4 7.77% 6M 13D 6M 30D Kotak Money Market Scheme Growth ₹4,112.01
↑ 1.22 ₹15,868 5,000 2.1 3.9 7.6 5.8 7.3 7.78% 9M 22D 9M 22D L&T Money Market Fund Growth ₹24.2062
↑ 0.01 ₹1,100 10,000 2 3.7 7.2 5.2 6.9 7.68% 7M 18D 8M 5D Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 23 Apr 24
Top 5 Short Term Bond Mutual Funds
Fund NAV Net Assets (Cr) 3 MO (%) 6 MO (%) 1 YR (%) 3 YR (%) 2023 (%) 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 ₹54.5793
↑ 0.04 ₹16,876 1.8 3.9 7.4 5.8 7.4 8.02% 2Y 7M 2D 4Y 9M 4D UTI Short Term Income Fund Growth ₹28.84
↑ 0.02 ₹2,689 2 4 7.2 7 6.9 7.51% 2Y 5M 8D 3Y 8M 5D Nippon India Short Term Fund Growth ₹47.758
↑ 0.03 ₹5,524 1.8 3.9 6.9 5.2 6.8 7.75% 2Y 8M 5D 3Y 6M Aditya Birla Sun Life Short Term Opportunities Fund Growth ₹43.112
↑ 0.02 ₹6,767 1.7 3.9 6.8 5.5 6.9 7.87% 2Y 10M 2D 4Y 2M 5D Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 29 Sep 23
Top 5 Medium to Long Term Bond Mutual Funds
Top Medium to Long Term Bond funds with AUM/Net Assets > 500 Crore.
Fund NAV Net Assets (Cr) 3 MO (%) 6 MO (%) 1 YR (%) 3 YR (%) 2023 (%) Debt Yield (YTM) Mod. Duration Eff. Maturity SBI Magnum Income Fund Growth ₹63.9865
↑ 0.06 ₹1,746 1.7 3.8 6.6 5.1 7.2 8.04% 5Y 8M 16D 10Y 5M 23D ICICI Prudential Bond Fund Growth ₹36.1213
↑ 0.06 ₹2,937 1.7 4.3 7.2 5.2 7.7 7.42% 5Y 9M 7D 9Y 1M 24D Aditya Birla Sun Life Income Fund Growth ₹113.503
↑ 0.17 ₹1,793 1.6 4.4 6 5 6.6 7.33% 6Y 6M 29D 10Y 6M 29D Kotak Bond Fund Growth ₹69.5834
↑ 0.12 ₹1,810 1.7 4.6 6.5 4.8 6.8 7.53% 6Y 9M 22D 16Y 7M 6D HDFC Income Fund Growth ₹52.557
↑ 0.07 ₹771 2.1 5 6.4 4 6.1 7.34% 6Y 8M 27D 11Y 4M Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 23 Apr 24
Top 5 Banking and PSU Debt Mutual Funds
Fund NAV Net Assets (Cr) 3 MO (%) 6 MO (%) 1 YR (%) 3 YR (%) 2023 (%) Debt Yield (YTM) Mod. Duration Eff. Maturity HDFC Banking and PSU Debt Fund Growth ₹20.864
↑ 0.02 ₹6,267 1.8 3.7 6.8 5.2 6.8 7.57% 2Y 10M 27D 4Y 17D UTI Banking & PSU Debt Fund Growth ₹19.9058
↑ 0.01 ₹947 1.7 3.8 6.4 7.1 6.7 7.51% 2Y 8M 8D 3Y 2M 19D ICICI Prudential Banking and PSU Debt Fund Growth ₹29.7271
↑ 0.03 ₹8,837 1.9 3.7 7.4 5.8 7.3 7.79% 2Y 11M 26D 5Y 4M 2D DSP BlackRock Banking and PSU Debt Fund Growth ₹21.7735
↑ 0.01 ₹2,376 2.1 4.1 6.8 5 6.7 7.56% 5Y 1M 28D 8Y 6M 22D Kotak Banking and PSU Debt fund Growth ₹59.2131
↑ 0.04 ₹5,992 1.8 3.8 6.8 5.5 6.8 7.74% 4Y 1M 10D 8Y 9M 22D Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 23 Apr 24
Top 5 Credit Risk Mutual Funds
Top Credit Risk funds with AUM/Net Assets > 500 Crore.
Fund NAV Net Assets (Cr) 3 MO (%) 6 MO (%) 1 YR (%) 3 YR (%) 2023 (%) Debt Yield (YTM) Mod. Duration Eff. Maturity HDFC Credit Risk Debt Fund Growth ₹21.8331
↑ 0.02 ₹8,167 1.9 4 7.1 6 6.6 8.62% 2Y 1M 19D 3Y 4D SBI Credit Risk Fund Growth ₹41.2827
↑ 0.01 ₹2,506 1.8 3.7 6.8 6.2 8.3 8.49% 2Y 14D 2Y 8M 12D Kotak Credit Risk Fund Growth ₹26.9359
↑ 0.03 ₹856 2 4.6 7.5 4.6 6.4 8.71% 2Y 5M 5D 3Y 1M 28D L&T Credit Risk Fund Growth ₹26.2725
↑ 0.02 ₹569 1.6 3.3 6.4 5.5 6.5 8.3% 1Y 10M 6D 2Y 8M 5D Nippon India Credit Risk Fund Growth ₹31.5309
↑ 0.02 ₹1,024 1.9 3.8 7.6 8.4 7.9 9.02% 1Y 10M 2D 2Y 2M 16D Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 23 Apr 24
Top 5 Dynamic Bond Mutual Funds
Top Dynamic Bond funds with AUM/Net Assets > 500 Crore.
Fund NAV Net Assets (Cr) 3 MO (%) 6 MO (%) 1 YR (%) 3 YR (%) 2023 (%) Debt Yield (YTM) Mod. Duration Eff. Maturity SBI Dynamic Bond Fund Growth ₹32.2731
↑ 0.06 ₹3,070 1.8 4.2 6.7 5.2 7.1 7.36% 7Y 4M 6D 14Y 6M Axis Dynamic Bond Fund Growth ₹26.7062
↑ 0.02 ₹1,708 2.1 4.2 6.7 5 6.6 7.5% 4Y 6M 25D 6Y 22D HDFC Dynamic Debt Fund Growth ₹81.2624
↑ 0.12 ₹669 1.8 4.4 6.6 6.2 6.7 7.38% 6Y 3M 2D 11Y 2M 10D IDFC Dynamic Bond Fund Growth ₹30.8275
↑ 0.06 ₹2,337 2.2 5.8 6.4 4.4 6.4 7.22% 11Y 6M 22D 27Y 8M 19D Aditya Birla Sun Life Dynamic Bond Fund Growth ₹41.4931
↑ 0.06 ₹1,732 1.6 4 6.4 6.2 6.9 7.46% 6Y 6M 7D 10Y 9M 18D Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 23 Apr 24
Top 5 Corporate Bond Mutual Funds
Top Corporate Bond funds with AUM/Net Assets > 500 Crore.
Fund NAV Net Assets (Cr) 3 MO (%) 6 MO (%) 1 YR (%) 3 YR (%) 2023 (%) Debt Yield (YTM) Mod. Duration Eff. Maturity HDFC Corporate Bond Fund Growth ₹29.4063
↑ 0.02 ₹28,499 2.1 3.9 7.4 5.5 7.2 7.73% 3Y 8D 5Y 2M Aditya Birla Sun Life Corporate Bond Fund Growth ₹101.885
↑ 0.08 ₹21,135 1.9 4.1 7.3 5.7 7.3 7.68% 3Y 7M 2D 5Y 6M 14D ICICI Prudential Corporate Bond Fund Growth ₹27.032
↑ 0.02 ₹26,230 1.9 3.8 7.6 5.9 7.6 7.92% 2Y 3M 14D 4Y 2M 23D Nippon India Prime Debt Fund Growth ₹54.0642
↑ 0.04 ₹2,818 1.9 4 7.2 5.8 7.1 7.74% 3Y 1M 20D 4Y 1M 13D Kotak Corporate Bond Fund Standard Growth ₹3,406.82
↑ 2.04 ₹11,584 1.9 3.9 7 5.4 6.9 7.77% 3Y 4M 10D 5Y 6M 18D Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 23 Apr 24
Top 5 Gilt Mutual Funds
Top (Erstwhile DHFL Pramerica Credit Opportunities Fund) The investment objective of the Scheme is to generate income and capital appreciation by investing predominantly in corporate debt. There can be no assurance that the investment objective of the Scheme will be realized. PGIM India Credit Risk Fund is a Debt - Credit Risk fund was launched on 29 Sep 14. It is a fund with Moderate risk and has given a Below is the key information for PGIM India Credit Risk Fund Returns up to 1 year are on (Erstwhile Aditya Birla Sun Life Floating Rate Fund - Short Term) The primary objective of the schemes is to generate regular income through investment in a portfolio comprising substantially of floating rate debt / money market instruments. The schemes may invest a portion of its net assets in fixed rate debt securities and money market instruments. Aditya Birla Sun Life Money Manager Fund is a Debt - Money Market fund was launched on 13 Oct 05. It is a fund with Low risk and has given a Below is the key information for Aditya Birla Sun Life Money Manager Fund Returns up to 1 year are on The primary objective of the schemes is to generate regular income through investments in debt and money market instruments. Income maybe generated through the receipt of coupon payments or the purchase and sale of securities in the underlying portfolio. The schemes will under normal market conditions, invest its net assets in fixed income securities, money market instruments, cash and cash equivalents. Aditya Birla Sun Life Savings Fund is a Debt - Ultrashort Bond fund was launched on 16 Apr 03. It is a fund with Moderately Low risk and has given a Below is the key information for Aditya Birla Sun Life Savings Fund Returns up to 1 year are on (Erstwhile HDFC Medium Term Opportunities Fund) To generate regular income through investments in Debt/
Money Market Instruments and Government Securities with
maturities not exceeding 60 months. HDFC Corporate Bond Fund is a Debt - Corporate Bond fund was launched on 29 Jun 10. It is a fund with Moderately Low risk and has given a Below is the key information for HDFC Corporate Bond Fund Returns up to 1 year are on (Erstwhile Aditya Birla Sun Life Short Term Fund) An Open-ended income scheme with the objective to generate income and capital appreciation by investing 100% of the corpus in a diversified portfolio of debt and money market securities. Aditya Birla Sun Life Corporate Bond Fund is a Debt - Corporate Bond fund was launched on 3 Mar 97. It is a fund with Moderately Low risk and has given a Below is the key information for Aditya Birla Sun Life Corporate Bond Fund Returns up to 1 year are on GILT funds with AUM/Net Assets > 500 Crore.
Fund NAV Net Assets (Cr) 3 MO (%) 6 MO (%) 1 YR (%) 3 YR (%) 2023 (%) Debt Yield (YTM) Mod. Duration Eff. Maturity ICICI Prudential Gilt Fund Growth ₹92.5253
↑ 0.18 ₹4,865 1.6 3.7 7.6 5.9 8.3 7.51% 4Y 11M 5D 9Y 6M 11D SBI Magnum Gilt Fund Growth ₹59.6084
↑ 0.09 ₹7,884 1.8 4.4 7 5.6 7.6 7.26% 8Y 15Y 5M 19D Aditya Birla Sun Life Government Securities Fund Growth ₹73.6291
↑ 0.14 ₹1,369 1.9 5.1 6.8 5 7.1 7.24% 8Y 5M 1D 15Y 11M 5D UTI Gilt Fund Growth ₹56.8524
↑ 0.10 ₹644 2 4.8 6.6 4.9 6.7 6.96% 6Y 4M 10D 9Y 1M 2D SBI Magnum Constant Maturity Fund Growth ₹56.8746
↑ 0.08 ₹1,653 1.8 4.9 6.6 4.8 7.5 7.23% 6Y 10M 10D 9Y 9M 25D Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 23 Apr 24 1. PGIM India Credit Risk Fund
CAGR/Annualized return of 6.3% since its launch. Ranked 2 in Credit Risk category. . PGIM India Credit Risk Fund
Growth Launch Date 29 Sep 14 NAV (21 Jan 22) ₹15.5876 ↑ 0.00 (0.01 %) Net Assets (Cr) ₹39 on 31 Dec 21 Category Debt - Credit Risk AMC Pramerica Asset Managers Private Limited Rating ☆☆☆☆☆ Risk Moderate Expense Ratio 1.85 Sharpe Ratio 1.73 Information Ratio 0 Alpha Ratio 0 Min Investment 5,000 Min SIP Investment 1,000 Exit Load 0-1 Years (1%),1 Years and above(NIL) Yield to Maturity 5.01% Effective Maturity 7 Months 2 Days Modified Duration 6 Months 14 Days Growth of 10,000 investment over the years.
Date Value 31 Mar 19 ₹10,000 31 Mar 20 ₹9,611 31 Mar 21 ₹10,154 Returns for PGIM India Credit Risk Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 21 Jan 22 Duration Returns 1 Month 0.3% 3 Month 0.6% 6 Month 4.4% 1 Year 8.4% 3 Year 3% 5 Year 4.2% 10 Year 15 Year Since launch 6.3% Historical performance (Yearly) on absolute basis
Year Returns 2023 2022 2021 2020 2019 2018 2017 2016 2015 2014 Fund Manager information for PGIM India Credit Risk Fund
Name Since Tenure Data below for PGIM India Credit Risk Fund as on 31 Dec 21
Asset Allocation
Asset Class Value Debt Sector Allocation
Sector Value Credit Quality
Rating Value Top Securities Holdings / Portfolio
Name Holding Value Quantity 2. Aditya Birla Sun Life Money Manager Fund
CAGR/Annualized return of 6.8% since its launch. Ranked 7 in Money Market category. Return for 2023 was 7.4% , 2022 was 4.8% and 2021 was 3.8% . Aditya Birla Sun Life Money Manager Fund
Growth Launch Date 13 Oct 05 NAV (23 Apr 24) ₹338.715 ↑ 0.10 (0.03 %) Net Assets (Cr) ₹18,375 on 31 Mar 24 Category Debt - Money Market AMC Birla Sun Life Asset Management Co Ltd Rating ☆☆☆☆☆ Risk Low Expense Ratio 0.33 Sharpe Ratio 2.18 Information Ratio 0 Alpha Ratio 0 Min Investment 1,000 Min SIP Investment 1,000 Exit Load NIL Yield to Maturity 7.93% Effective Maturity 9 Months 25 Days Modified Duration 9 Months 22 Days Growth of 10,000 investment over the years.
Date Value 31 Mar 19 ₹10,000 31 Mar 20 ₹10,750 31 Mar 21 ₹11,382 31 Mar 22 ₹11,834 31 Mar 23 ₹12,503 31 Mar 24 ₹13,459 Returns for Aditya Birla Sun Life Money Manager Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 21 Jan 22 Duration Returns 1 Month 0.8% 3 Month 2.1% 6 Month 3.9% 1 Year 7.6% 3 Year 5.8% 5 Year 6.1% 10 Year 15 Year Since launch 6.8% Historical performance (Yearly) on absolute basis
Year Returns 2023 7.4% 2022 4.8% 2021 3.8% 2020 6.6% 2019 8% 2018 7.9% 2017 6.8% 2016 7.7% 2015 8.4% 2014 9.2% Fund Manager information for Aditya Birla Sun Life Money Manager Fund
Name Since Tenure Kaustubh Gupta 15 Jul 11 12.72 Yr. Anuj Jain 22 Mar 21 3.03 Yr. Mohit Sharma 1 Apr 17 7.01 Yr. Dhaval Joshi 21 Nov 22 1.36 Yr. Data below for Aditya Birla Sun Life Money Manager Fund as on 31 Mar 24
Asset Allocation
Asset Class Value Cash 60.91% Debt 38.87% Other 0.23% Debt Sector Allocation
Sector Value Corporate 47.58% Government 27.9% Cash Equivalent 24.29% Credit Quality
Rating Value AAA 100% Top Securities Holdings / Portfolio
Name Holding Value Quantity India (Republic of)
- | -3% ₹470 Cr 50,000,000 Axis Bank Ltd.
Debentures | -2% ₹468 Cr 10,000 National Bank for Agriculture and Rural Development
Domestic Bonds | -2% ₹467 Cr 10,000 National Bank for Agriculture and Rural Development
Domestic Bonds | -2% ₹466 Cr 10,000 IDFC First Bank Ltd.
Debentures | -2% ₹466 Cr 10,000 05.80 MH Sdl 2025
Sovereign Bonds | -2% ₹464 Cr 47,000,000
↑ 33,500,000 Tata Teleservices Ltd
Debentures | -2% ₹442 Cr 9,500 Small Industries Development Bank of India
Debentures | -2% ₹372 Cr 8,000 Indusind Bank Ltd.
Debentures | -2% ₹281 Cr 6,000 Kotak Mahindra Bank Ltd.
Debentures | -1% ₹240 Cr 5,000 3. Aditya Birla Sun Life Savings Fund
CAGR/Annualized return of 7.4% since its launch. Ranked 6 in Ultrashort Bond category. Return for 2023 was 7.2% , 2022 was 4.8% and 2021 was 3.9% . Aditya Birla Sun Life Savings Fund
Growth Launch Date 16 Apr 03 NAV (23 Apr 24) ₹501.391 ↑ 0.06 (0.01 %) Net Assets (Cr) ₹10,748 on 31 Mar 24 Category Debt - Ultrashort Bond AMC Birla Sun Life Asset Management Co Ltd Rating ☆☆☆☆☆ Risk Moderately Low Expense Ratio 0.52 Sharpe Ratio 1.48 Information Ratio 0 Alpha Ratio 0 Min Investment 1,000 Min SIP Investment 1,000 Exit Load NIL Yield to Maturity 7.95% Effective Maturity 6 Months 4 Days Modified Duration 5 Months 12 Days Growth of 10,000 investment over the years.
Date Value 31 Mar 19 ₹10,000 31 Mar 20 ₹10,773 31 Mar 21 ₹11,456 31 Mar 22 ₹11,933 31 Mar 23 ₹12,579 31 Mar 24 ₹13,513 Returns for Aditya Birla Sun Life Savings Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 21 Jan 22 Duration Returns 1 Month 0.8% 3 Month 2.1% 6 Month 3.8% 1 Year 7.5% 3 Year 5.8% 5 Year 6.2% 10 Year 15 Year Since launch 7.4% Historical performance (Yearly) on absolute basis
Year Returns 2023 7.2% 2022 4.8% 2021 3.9% 2020 7% 2019 8.5% 2018 7.6% 2017 7.2% 2016 9.2% 2015 8.9% 2014 9.7% Fund Manager information for Aditya Birla Sun Life Savings Fund
Name Since Tenure Sunaina Cunha 20 Jun 14 9.79 Yr. Kaustubh Gupta 15 Jul 11 12.72 Yr. Monika Gandhi 22 Mar 21 3.03 Yr. Dhaval Joshi 21 Nov 22 1.36 Yr. Data below for Aditya Birla Sun Life Savings Fund as on 31 Mar 24
Asset Allocation
Asset Class Value Cash 31.2% Debt 68.48% Other 0.31% Debt Sector Allocation
Sector Value Corporate 62.25% Cash Equivalent 19.08% Government 18.23% Securitized 0.12% Credit Quality
Rating Value AA 32.11% AAA 67.89% Top Securities Holdings / Portfolio
Name Holding Value Quantity HDFC Bank Limited
Debentures | -5% ₹597 Cr 6,000 Nirma Limited
Debentures | -4% ₹500 Cr 50,000 DBS Bank India Ltd.
Debentures | -4% ₹464 Cr 10,000
↑ 10,000 Tata Realty And Infrastructure Limited
Debentures | -3% ₹360 Cr 36,000 Hindalco Industries Limited
Debentures | -3% ₹350 Cr 35,000 Bharti Telecom Limited
Debentures | -3% ₹324 Cr 3,250 Pipeline Infrastructure Limited
Debentures | -3% ₹310 Cr 3,100 National Bank For Agriculture And Rural Development
Debentures | -2% ₹302 Cr 3,035 National Bank For Agriculture And Rural Development
Debentures | -2% ₹267 Cr 2,750 Nirma Limited 8.3%
Debentures | -2% ₹250 Cr 25,000 4. HDFC Corporate Bond Fund
CAGR/Annualized return of 8.1% since its launch. Ranked 2 in Corporate Bond category. Return for 2023 was 7.2% , 2022 was 3.3% and 2021 was 3.9% . HDFC Corporate Bond Fund
Growth Launch Date 29 Jun 10 NAV (23 Apr 24) ₹29.4063 ↑ 0.02 (0.06 %) Net Assets (Cr) ₹28,499 on 31 Mar 24 Category Debt - Corporate Bond AMC HDFC Asset Management Company Limited Rating ☆☆☆☆☆ Risk Moderately Low Expense Ratio 0.59 Sharpe Ratio 1.13 Information Ratio 0 Alpha Ratio 0 Min Investment 5,000 Min SIP Investment 300 Exit Load NIL Yield to Maturity 7.73% Effective Maturity 5 Years 2 Months Modified Duration 3 Years 8 Days Growth of 10,000 investment over the years.
Date Value 31 Mar 19 ₹10,000 31 Mar 20 ₹11,011 31 Mar 21 ₹11,979 31 Mar 22 ₹12,558 31 Mar 23 ₹13,061 31 Mar 24 ₹14,096 Returns for HDFC Corporate Bond Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 21 Jan 22 Duration Returns 1 Month 0.5% 3 Month 2.1% 6 Month 3.9% 1 Year 7.4% 3 Year 5.5% 5 Year 7.2% 10 Year 15 Year Since launch 8.1% Historical performance (Yearly) on absolute basis
Year Returns 2023 7.2% 2022 3.3% 2021 3.9% 2020 11.8% 2019 10.3% 2018 6.5% 2017 6.5% 2016 10.6% 2015 8.6% 2014 10.9% Fund Manager information for HDFC Corporate Bond Fund
Name Since Tenure Anupam Joshi 27 Oct 15 8.44 Yr. Dhruv Muchhal 22 Jun 23 0.78 Yr. Data below for HDFC Corporate Bond Fund as on 31 Mar 24
Asset Allocation
Asset Class Value Cash 3.37% Debt 96.39% Other 0.24% Debt Sector Allocation
Sector Value Corporate 48.42% Government 47.88% Cash Equivalent 3.37% Securitized 0.09% Credit Quality
Rating Value AAA 100% Top Securities Holdings / Portfolio
Name Holding Value Quantity 8.25% Govt Stock 2033
Sovereign Bonds | -5% ₹1,474 Cr 145,000,000
↓ -5,000,000 7.18% Govt Stock 2037
Sovereign Bonds | -4% ₹1,055 Cr 105,000,000
↑ 57,500,000 8.1% Govt Stock 2034
Sovereign Bonds | -3% ₹973 Cr 97,500,000
↓ -12,000,000 National Bank For Agriculture And Rural Development
Debentures | -3% ₹796 Cr 80,000 Hdb Financial Services Limited
Debentures | -3% ₹725 Cr 72,500 7.69% Govt Stock 2028
Sovereign Bonds | -2% ₹673 Cr 67,500,000
↓ -17,500,000 Mangalore Refinery And Petrochemicals Limited
Debentures | -2% ₹554 Cr 5,670 Reliance Industries Limited
Debentures | -2% ₹525 Cr 5,000 HDFC Bank Limited
Debentures | -2% ₹503 Cr 50,000 LIC Housing Finance Limited
Debentures | -2% ₹497 Cr 5,000 5. Aditya Birla Sun Life Corporate Bond Fund
CAGR/Annualized return of 8.9% since its launch. Ranked 1 in Corporate Bond category. Return for 2023 was 7.3% , 2022 was 4.1% and 2021 was 4% . Aditya Birla Sun Life Corporate Bond Fund
Growth Launch Date 3 Mar 97 NAV (23 Apr 24) ₹101.885 ↑ 0.08 (0.08 %) Net Assets (Cr) ₹21,135 on 31 Mar 24 Category Debt - Corporate Bond AMC Birla Sun Life Asset Management Co Ltd Rating ☆☆☆☆☆ Risk Moderately Low Expense Ratio 0.47 Sharpe Ratio 1.14 Information Ratio 0 Alpha Ratio 0 Min Investment 1,000 Min SIP Investment 100 Exit Load NIL Yield to Maturity 7.68% Effective Maturity 5 Years 6 Months 14 Days Modified Duration 3 Years 7 Months 2 Days Growth of 10,000 investment over the years.
Date Value 31 Mar 19 ₹10,000 31 Mar 20 ₹10,922 31 Mar 21 ₹11,990 31 Mar 22 ₹12,588 31 Mar 23 ₹13,174 31 Mar 24 ₹14,202 Returns for Aditya Birla Sun Life Corporate Bond Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 21 Jan 22 Duration Returns 1 Month 0.4% 3 Month 1.9% 6 Month 4.1% 1 Year 7.3% 3 Year 5.7% 5 Year 7.3% 10 Year 15 Year Since launch 8.9% Historical performance (Yearly) on absolute basis
Year Returns 2023 7.3% 2022 4.1% 2021 4% 2020 11.9% 2019 9.6% 2018 7% 2017 6.5% 2016 10.2% 2015 8.9% 2014 10.9% Fund Manager information for Aditya Birla Sun Life Corporate Bond Fund
Name Since Tenure Kaustubh Gupta 12 Apr 21 2.97 Yr. Dhaval Joshi 21 Nov 22 1.36 Yr. Data below for Aditya Birla Sun Life Corporate Bond Fund as on 31 Mar 24
Asset Allocation
Asset Class Value Cash 4.21% Debt 95.55% Other 0.24% Debt Sector Allocation
Sector Value Corporate 48.53% Government 46.02% Cash Equivalent 4.21% Securitized 1.01% Credit Quality
Rating Value AAA 100% Top Securities Holdings / Portfolio
Name Holding Value Quantity 7.18% Govt Stock 2033
Sovereign Bonds | -11% ₹2,318 Cr 230,000,000
↓ -40,000,000 7.18% Govt Stock 2037
Sovereign Bonds | -8% ₹1,843 Cr 183,324,100
↑ 13,000,000 7.26% Govt Stock 2033
Sovereign Bonds | -5% ₹1,133 Cr 112,089,300
↓ -7,500,000 7.32% Govt Stock 2030
Sovereign Bonds | -3% ₹729 Cr 72,000,000 National Bank For Agriculture And Rural Development
Debentures | -3% ₹726 Cr 7,300 8.1% Govt Stock 2034
Sovereign Bonds | -3% ₹665 Cr 66,637,700 Small Industries Development Bank Of India
Debentures | -3% ₹544 Cr 54,550 HDFC Bank Limited
Debentures | -2% ₹403 Cr 40,000 National Bank For Agriculture And Rural Development
Debentures | -2% ₹397 Cr 4,000
↑ 150 National Bank For Agriculture And Rural Development
Debentures | -2% ₹393 Cr 39,500
How to Evaluate Best Debt Mutual Funds
In order to select the best debt funds you wish to invest in, it is necessary to consider some of the important parameters such as average maturity, credit quality, AUM, expense ratio, tax implication., etc. Let's have an in-depth look-
1. 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 its maturity period, Matching the time period of investment with the maturity period of the debt fund is a good way to ensure you don't end up taking unnecessary risk. Thus, it is advisable to know the average maturity of a debt fund, before investing, in order to aim for optimum risk returns in debt funds. Looking at the average maturity (duration is a similar factor) is important, for example, a liquid fund may have an average maturity of a couple of days to maybe a month, this would mean it is a great option for an investor who is looking to invest money for a couple of days. Similarly, if you are looking at the time frame of one-year Investment plan then, a short-term debt fund can be ideal.
2. Interest Rate Scenario
Understanding the market environment is very important in debt funds which are affected by interest rates and its fluctuations. When the interest rate rises in the economy, the bond price falls and vice-versa. Also, during the time when the interest rates rise, new bonds are issued in the market with a higher yield than the older bonds, making those older bonds of lower value. Therefore, investors are more attracted towards newer bonds in the market and also a re-pricing of older bonds takes place. In case a debt fund is having an exposure to such "older bonds" then when the interest rates rise, the NAV of the debt fund would be impacted negatively. Furthermore, as debt funds are exposed to interest rate fluctuations, it disturbs the prices of the underlying bonds in the fund portfolio. For instance, long-term debt funds are at a higher risk during times of rising interest rates. During this time making a short-term investment plan will lower your interest rate risks.
If one has good knowledge of interest rates and can monitor the same, one can even take advantage of this. In a falling interest rate market, long-term debt funds would be a good choice. However, during the times of rising interest rates then it would be wise to be in funds with shorter average maturities like short-term funds, Ultra Short Term fund or even liquid funds.
3. Current Yield or Portfolio Yield
The yield is a measure of the interest income generated by the bonds in the portfolio. Funds that invest in debt or bonds that have a higher coupon rate (or yield) would have a higher overall portfolio yield. The yield to maturity(ytm) of a debt mutual fund indicates the running yield of the fund. When comparing debt funds on the basis of YTM, one should also look at that fact that how is the extra yield being generated. Is this at the cost of as lower portfolio quality? Investing in not so good quality instruments has its own issues. You don't want to end up investing in a debt fund which has such bonds or securities that may Default later on. So, always look at the portfolio yield and balance it off with the credit quality.
4. Credit Quality of Portfolio
In order to invest in best debt funds, checking the credit quality of the bonds and debt securities is an essential parameter. Bonds are assigned a credit rating by various agencies based on their ability to pay the money back. A bond with AAA rating is considered to be the best credit rating and also implies a safe and secure investment. If one truly wants safety and considers this as the paramount parameter in selecting the best debt fund, then getting into a fund with very high-quality debt instruments (AAA or AA+) may be the desired option.
5. Assets Under Management (AUM)
This is the foremost parameter to consider while choosing the best debt funds. AUM is the total amount invested in a particular scheme by all investors. Since, most Mutual Funds’ total AUM is invested in debt funds, investors need to select scheme assets that have a considerable AUM. Being in a fund which has a large exposure to corporates may be risky, since their withdrawals may be large which may affect the overall fund performance.
6. Expense Ratio
An important factor to be considered in debt funds is its expense ratio. A higher expense ratio creates a larger impact on the funds’ performance. For example, liquid funds have the lowest expense ratios which are up to 50 bps (BPS is a unit to measure interest rates wherein one bps is equal to 1/100th of 1%) whereas, other debt funds could charge up to 150 bps. So to make a choice between one debt mutual fund, it is important to consider the management fee or the fund running expense.
7. Taxation Impacts
Debt funds offer the benefit of long-term capital gains (more than 3 years) with indexation benefits. And the short term capital gains (less than 3 years) is taxed at 30%.
Things to consider as an investor
1. Fund Objectives
Debt Fund aims to earn optimal returns by maintaining a diversified portfolio of various types of securities. You can expect them to perform in a predictable manner. It is because of this reason, that debt funds are popular among conservative investors.
2. Fund Types
Debt funds are further divided into various categories like liquid funds, Monthly Income Plan (MIP), fixed maturity plans (FMP), Dynamic Bond Funds, income funds, credit opportunities funds, GILT funds, short-term funds and ultra short-term funds.
3. Risks
Debt funds are basically exposed to interest rate risk, credit risk, and liquidity risk. The fund value may fluctuate due to the overall interest rate movements. There’s a risk of default in the payment of interest and principal by the issuer. Liquidity risk happens when the fund manager is unable to sell the underlying security due to lack of demand.
4. Cost
Debt funds charge an expense ratio to manage your money. Till now SEBI had mandated the upper limit of expense ratio to be 2.25% (Might change time to time with regulations.).
5. Investment Horizon
An investment of 3 months to 1 year would be ideal for liquid funds. If you have a longer horizon of say 2 to 3 years, you may go for short-term bond funds.
6. Financial Goals
Debt funds can be used to achieve a variety of goals like earning additional income or for purpose of liquidity.
How to Invest in Best Debt Funds Online?
Open Free Investment Account for Lifetime at Fincash.com.
Complete your Registration and KYC Process
Upload Documents (PAN, Aadhaar, etc.). And, You are Ready to Invest!
Conclusion
Debt funds are one of the best ways to invest your money and generate income on a regular basis by choosing the relevant product matching your risk profile. So, investors looking to generate steady income or take advantage of the debt markets, can consider the above best debt funds for 2024 - 2025 and start investing!_
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.
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The article is nice and informative but it could be in more simple words because lot of people have much less knowledge in such sector