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 23 - 24
- 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 2023
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 2023 - 2024.
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 23 - 24
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 (%) 2022 (%) Debt Yield (YTM) Mod. Duration Eff. Maturity Axis Liquid Fund Growth ₹2,551.37
↑ 0.48 ₹27,002 500 0.6 1.7 3.5 6.7 4.9 6.99% 2M 2D 2M 2D Aditya Birla Sun Life Liquid Fund Growth ₹369.501
↑ 0.07 ₹46,406 5,000 0.5 1.7 3.5 6.7 4.8 7% 1M 13D 1M 17D ICICI Prudential Liquid Fund Growth ₹339.514
↑ 0.07 ₹47,753 500 0.5 1.7 3.5 6.6 4.8 6.99% 1M 24D 1M 28D Nippon India Liquid Fund Growth ₹5,598.92
↑ 1.04 ₹32,768 100 0.5 1.7 3.4 6.6 4.8 6.9% 1M 6D 1M 9D Tata Liquid Fund Growth ₹3,612.32
↑ 0.66 ₹27,694 5,000 0.6 1.7 3.4 6.6 4.8 7.03% 1M 26D 1M 26D Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 22 Aug 23
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 (%) 2022 (%) Debt Yield (YTM) Mod. Duration Eff. Maturity Aditya Birla Sun Life Savings Fund Growth ₹477.445
↑ 0.09 ₹14,783 1,000 1.7 3.7 6.8 5.1 4.8 7.39% 5M 1D 5M 8D UTI Ultra Short Term Fund Growth ₹3,730.09
↑ 0.71 ₹2,494 5,000 1.6 3.5 6.3 5.5 4.2 7.49% 5M 9D 5M 16D ICICI Prudential Ultra Short Term Fund Growth ₹24.2611
↑ 0.00 ₹13,815 5,000 1.6 3.6 6.6 5 4.5 7.37% 4M 17D 5M 8D SBI Magnum Ultra Short Duration Fund Growth ₹5,235.11
↑ 0.88 ₹15,030 5,000 1.6 3.6 6.6 4.6 4.5 7.19% 5M 12D 5M 26D Kotak Savings Fund Growth ₹37.7024
↑ 0.01 ₹13,066 5,000 1.6 3.5 6.5 4.5 4.5 7.29% 5M 19D 8M 12D Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 22 Aug 23
Top and Best Floating Rate Mutual Funds
Fund NAV Net Assets (Cr) Min Investment 3 MO (%) 6 MO (%) 1 YR (%) 3 YR (%) 2022 (%) Debt Yield (YTM) Mod. Duration Eff. Maturity Aditya Birla Sun Life Floating Rate Fund - Long Term Growth ₹301.96
↑ 0.05 ₹12,690 1,000 1.8 4 7.1 5.3 4.8 7.46% 11M 12D 1Y 1M 2D ICICI Prudential Floating Interest Fund Growth ₹368.796
↑ 0.06 ₹13,699 5,000 2.4 4.4 8.3 5.7 4.3 8.43% 10M 17D 8Y 6M 29D Nippon India Floating Rate Fund Growth ₹39.007
↓ 0.00 ₹7,253 5,000 1.5 4 6.7 5.2 3.8 7.59% 2Y 5M 5D 3Y 3M 18D Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 22 Aug 23
Top 5 Best Money Market Mutual Funds
Fund NAV Net Assets (Cr) Min Investment 3 MO (%) 6 MO (%) 1 YR (%) 3 YR (%) 2022 (%) Debt Yield (YTM) Mod. Duration Eff. Maturity Aditya Birla Sun Life Money Manager Fund Growth ₹322.19
↑ 0.07 ₹15,637 1,000 1.7 3.8 7.1 5 4.8 7.32% 5M 23D 5M 23D UTI Money Market Fund Growth ₹2,684.29
↑ 0.57 ₹9,998 10,000 1.7 3.8 7.1 5 4.9 7.36% 6M 9D 6M 10D ICICI Prudential Money Market Fund Growth ₹330.533
↑ 0.07 ₹17,050 500 1.7 3.8 7 4.9 4.7 7.41% 7M 14D 8M 2D Kotak Money Market Scheme Growth ₹3,913.2
↑ 0.81 ₹18,147 5,000 1.7 3.8 6.9 4.9 4.9 7.28% 6M 4D 6M 4D L&T Money Market Fund Growth ₹23.0861
↑ 0.00 ₹1,041 10,000 1.6 3.6 6.5 4.2 4 7.17% 6M 21D 6M 21D Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 22 Aug 23
Top 5 Short Term Bond Mutual Funds
Fund NAV Net Assets (Cr) 3 MO (%) 6 MO (%) 1 YR (%) 3 YR (%) 2022 (%) Debt Yield (YTM) Mod. Duration Eff. Maturity PGIM India Short Maturity Fund Growth ₹39.0966
↑ 0.01 ₹28 1 3.3 5.7 4.1 3.3 7.14% 1Y 8M 8D 1Y 11M 12D ICICI Prudential Short Term Fund Growth ₹52.0678
↑ 0.01 ₹18,245 1.5 4 7.2 5.5 4.7 7.92% 1Y 9M 25D 4Y 11M 19D UTI Short Term Income Fund Growth ₹27.4733
↑ 0.00 ₹2,383 1.1 3.6 6.4 6.4 3.8 7.29% 2Y 1M 20D 2Y 6M 4D Aditya Birla Sun Life Short Term Opportunities Fund Growth ₹41.214
↑ 0.01 ₹6,040 1.2 3.7 6.3 5.5 4.2 7.76% 2Y 1M 13D 2Y 7M 13D Nippon India Short Term Fund Growth ₹45.6097
↓ 0.00 ₹6,164 1.1 3.7 6 5 3.2 7.57% 2Y 5M 16D 3Y 2M 5D Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 22 Aug 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 (%) 2022 (%) Debt Yield (YTM) Mod. Duration Eff. Maturity SBI Magnum Income Fund Growth ₹61.3049
↓ -0.01 ₹1,626 0.7 4.4 7.2 5.2 3 7.75% 4Y 25D 7Y 3M 18D ICICI Prudential Bond Fund Growth ₹34.4624
↑ 0.01 ₹2,913 0.9 4.3 7 4.8 3.1 7.67% 3Y 4M 10D 5Y 11M 8D Aditya Birla Sun Life Income Fund Growth ₹109.002
↑ 0.02 ₹1,836 0.6 3.9 6.1 4.9 2.4 7.41% 4Y 3M 7D 5Y 8M 19D Kotak Bond Fund Growth ₹66.5352
↑ 0.02 ₹1,759 0.6 3.9 6.1 4.3 1.7 7.56% 4Y 8M 1D 9Y 18D HDFC Income Fund Growth ₹50.125
↑ 0.02 ₹623 0 3.5 5.5 3.3 0.9 7.4% 6Y 2M 4D 9Y 9M 18D Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 22 Aug 23
Top 5 Banking and PSU Debt Mutual Funds
Fund NAV Net Assets (Cr) 3 MO (%) 6 MO (%) 1 YR (%) 3 YR (%) 2022 (%) Debt Yield (YTM) Mod. Duration Eff. Maturity HDFC Banking and PSU Debt Fund Growth ₹19.9507
↓ 0.00 ₹6,373 1.3 3.7 6.3 4.9 3.3 7.46% 2Y 3M 6D 3Y 5M 2D UTI Banking & PSU Debt Fund Growth ₹19.0338
↓ -0.01 ₹967 0.7 3.7 5.6 6.5 10.3 7.43% 3Y 1M 2D 3Y 9M ICICI Prudential Banking and PSU Debt Fund Growth ₹28.3816
↑ 0.00 ₹8,146 1.6 3.9 7.2 5.5 4.3 7.79% 1Y 9M 4Y 5M 19D Kotak Banking and PSU Debt fund Growth ₹56.5456
↓ -0.02 ₹6,343 1 3.6 6.4 5 3.6 7.79% 3Y 1M 17D 9Y 7M 17D Aditya Birla Sun Life Banking & PSU Debt Fund Growth ₹317.783
↓ -0.04 ₹8,400 1.2 3.6 6.2 5 3.7 7.5% 2Y 6M 11D 4Y 11M 23D Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 22 Aug 23
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 (%) 2022 (%) Debt Yield (YTM) Mod. Duration Eff. Maturity Axis Credit Risk Fund Growth ₹18.5058
↑ 0.00 ₹529 1.3 3.6 6.4 6 4 8.44% 1Y 8M 16D 2Y 22D SBI Credit Risk Fund Growth ₹39.4495
↓ 0.00 ₹2,761 1.3 5 7.8 6.4 4.2 8.1% 1Y 11M 12D 4Y 4M 20D HDFC Credit Risk Debt Fund Growth ₹20.8335
↑ 0.00 ₹8,492 1.2 3.6 6.2 6.7 3.7 8.47% 2Y 7D 2Y 7M 18D Kotak Credit Risk Fund Growth ₹25.5164
↑ 0.00 ₹1,042 1.1 3.4 4.9 4.4 0.9 8.51% 1Y 9M 22D 3Y 4D Nippon India Credit Risk Fund Growth ₹30.0359
↑ 0.01 ₹1,019 1.7 4.4 7.2 8.9 3.9 8.97% 1Y 10M 28D 2Y 2M 19D Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 22 Aug 23
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 (%) 2022 (%) Debt Yield (YTM) Mod. Duration Eff. Maturity SBI Dynamic Bond Fund Growth ₹30.9024
↑ 0.01 ₹2,983 0.6 4.7 8.1 4.8 4.2 7.24% 3Y 3M 18D 3Y 10M 28D Aditya Birla Sun Life Dynamic Bond Fund Growth ₹39.7754
↑ 0.00 ₹1,660 0.9 3.9 6.3 6.2 6 7.55% 3Y 3M 25D 4Y 6M 7D Axis Dynamic Bond Fund Growth ₹25.4865
↓ 0.00 ₹1,838 0.4 3.9 6.1 4.7 2.1 7.43% 4Y 11M 12D 6Y 8M 5D HDFC Dynamic Debt Fund Growth ₹77.6688
↑ 0.02 ₹642 0.9 3.8 6.1 5.5 1.6 7.49% 3Y 8M 9D 7Y 2M 18D IDFC Dynamic Bond Fund Growth ₹29.3141
↑ 0.01 ₹2,315 0.1 3.8 5.2 3.5 1 7.29% 4Y 6M 11D 5Y 8M 16D Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 22 Aug 23
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 (%) 2022 (%) Debt Yield (YTM) Mod. Duration Eff. Maturity Aditya Birla Sun Life Corporate Bond Fund Growth ₹97.1847
↑ 0.01 ₹17,961 1.5 3.9 6.8 5.4 4.1 7.62% 2Y 2M 5D 2Y 9M 22D HDFC Corporate Bond Fund Growth ₹28.0379
↓ 0.00 ₹26,407 1.4 4.1 6.8 5.2 3.3 7.65% 2Y 9M 5Y 1M 21D ICICI Prudential Corporate Bond Fund Growth ₹25.7891
↑ 0.00 ₹22,656 1.7 4.1 7.5 5.6 4.5 7.91% 1Y 6M 14D 4Y 1M 2D Nippon India Prime Debt Fund Growth ₹51.5849
↓ 0.00 ₹2,459 1.2 4 6.8 5.7 4.3 7.52% 2Y 6M 29D 3Y 4M 6D Kotak Corporate Bond Fund Standard Growth ₹3,251.97
↓ -0.18 ₹10,534 1.2 3.8 6.3 4.9 3.7 7.69% 2Y 5M 1D 3Y 11M 12D Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 22 Aug 23
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 To generate income through investments in a range of debt and money market instruments of various maturities with a view to maximising income while maintaining the optimum balance of yield, safety and liquidity. ICICI Prudential Long Term Plan is a Debt - Dynamic Bond fund was launched on 20 Jan 10. It is a fund with Moderate risk and has given a Below is the key information for ICICI Prudential Long Term Plan 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 (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 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 GILT funds with AUM/Net Assets > 500 Crore.
Fund NAV Net Assets (Cr) 3 MO (%) 6 MO (%) 1 YR (%) 3 YR (%) 2022 (%) Debt Yield (YTM) Mod. Duration Eff. Maturity ICICI Prudential Gilt Fund Growth ₹88.5115
↑ 0.03 ₹4,001 1.7 4.8 8.5 5.5 3.7 7.88% 2Y 5M 23D 7Y 9M 11D SBI Magnum Gilt Fund Growth ₹56.8857
↑ 0.01 ₹7,060 0.5 4.8 8.2 5.3 4.2 7.12% 3Y 4M 28D 4Y 4M 28D SBI Magnum Constant Maturity Fund Growth ₹54.3374
↑ 0.02 ₹1,507 0.1 4.5 6.9 4.1 1.3 7.32% 6Y 6M 29D 9Y 6M 11D UTI Gilt Fund Growth ₹54.2471
↑ 0.02 ₹536 0.7 3.9 6.8 4.1 2.9 6.93% 3Y 11M 19D 4Y 8M 8D Nippon India Gilt Securities Fund Growth ₹32.9536
↑ 0.01 ₹1,411 0.3 4 6.5 3.8 2.1 7.24% 4Y 8M 19D 6Y 6M 25D Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 22 Aug 23 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 Aug 18 ₹10,000 31 Aug 19 ₹10,273 31 Aug 20 ₹9,843 31 Aug 21 ₹10,739 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 2022 2021 2020 2019 2018 2017 2016 2015 2014 2013 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. ICICI Prudential Long Term Plan
CAGR/Annualized return of 8.9% since its launch. Ranked 1 in Dynamic Bond category. Return for 2022 was 4.5% , 2021 was 4.3% and 2020 was 11.8% . ICICI Prudential Long Term Plan
Growth Launch Date 20 Jan 10 NAV (22 Aug 23) ₹31.812 ↑ 0.01 (0.03 %) Net Assets (Cr) ₹10,902 on 31 Jul 23 Category Debt - Dynamic Bond AMC ICICI Prudential Asset Management Company Limited Rating ☆☆☆☆☆ Risk Moderate Expense Ratio 1.36 Sharpe Ratio 1.21 Information Ratio 0 Alpha Ratio 0 Min Investment 5,000 Min SIP Investment 100 Exit Load 0-1 Months (0.25%),1 Months and above(NIL) Yield to Maturity 8.03% Effective Maturity 5 Years Modified Duration 2 Years 4 Months 24 Days Growth of 10,000 investment over the years.
Date Value 31 Aug 18 ₹10,000 31 Aug 19 ₹11,012 31 Aug 20 ₹12,193 31 Aug 21 ₹13,054 31 Aug 22 ₹13,529 31 Aug 23 ₹14,512 Returns for ICICI Prudential Long Term Plan
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 1.3% 6 Month 4% 1 Year 7.4% 3 Year 5.8% 5 Year 7.7% 10 Year 15 Year Since launch 8.9% Historical performance (Yearly) on absolute basis
Year Returns 2022 4.5% 2021 4.3% 2020 11.8% 2019 10.2% 2018 6.2% 2017 5.1% 2016 16.9% 2015 5.7% 2014 19.4% 2013 9.6% Fund Manager information for ICICI Prudential Long Term Plan
Name Since Tenure Manish Banthia 28 Sep 12 10.93 Yr. Nikhil Kabra 12 Jun 23 0.22 Yr. Data below for ICICI Prudential Long Term Plan as on 31 Jul 23
Asset Allocation
Asset Class Value Cash 10.9% Debt 89.1% Debt Sector Allocation
Sector Value Government 56.02% Corporate 37.54% Cash Equivalent 6.44% Credit Quality
Rating Value AA 25.15% AAA 74.85% Top Securities Holdings / Portfolio
Name Holding Value Quantity 7.38% Govt Stock 2027
Sovereign Bonds | -16% ₹1,739 Cr 172,735,270
↑ 15,000,000 7.06% Govt Stock 2028
Sovereign Bonds | -10% ₹1,171 Cr 117,500,000
↑ 20,000,000 7.26% Govt Stock 2033
Sovereign Bonds | -7% ₹809 Cr 80,346,730
↓ -19,250,000 8.51% Govt Stock 2033
Sovereign Bonds | -6% ₹706 Cr 69,598,050 07.18 Goi 2033
Sovereign Bonds | -4% ₹492 Cr 49,051,800
↑ 3,340,000 7.879999999999999% Govt Stock 2028
Sovereign Bonds | -3% ₹312 Cr 31,315,650
↓ -7,500,000 7.93% Govt Stock 2034
Sovereign Bonds | -3% ₹284 Cr 28,460,800
↓ -5,000,000 Small Industries Development Bank Of India
Debentures | -2% ₹274 Cr 27,500 07.18 Goi 2037
Sovereign Bonds | -2% ₹197 Cr 19,796,200
↓ -21,703,800 Embassy Office Parks Reit
Debentures | -1% ₹123 Cr 1,250 3. Aditya Birla Sun Life Money Manager Fund
CAGR/Annualized return of 6.8% since its launch. Ranked 7 in Money Market category. Return for 2022 was 4.8% , 2021 was 3.8% and 2020 was 6.6% . Aditya Birla Sun Life Money Manager Fund
Growth Launch Date 13 Oct 05 NAV (22 Aug 23) ₹322.19 ↑ 0.07 (0.02 %) Net Assets (Cr) ₹15,637 on 31 Jul 23 Category Debt - Money Market AMC Birla Sun Life Asset Management Co Ltd Rating ☆☆☆☆☆ Risk Low Expense Ratio 0.33 Sharpe Ratio 1.79 Information Ratio 0 Alpha Ratio 0 Min Investment 1,000 Min SIP Investment 1,000 Exit Load NIL Yield to Maturity 7.32% Effective Maturity 5 Months 23 Days Modified Duration 5 Months 23 Days Growth of 10,000 investment over the years.
Date Value 31 Aug 18 ₹10,000 31 Aug 19 ₹10,877 31 Aug 20 ₹11,677 31 Aug 21 ₹12,156 31 Aug 22 ₹12,638 31 Aug 23 ₹13,539 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 0.6% 3 Month 1.7% 6 Month 3.8% 1 Year 7.1% 3 Year 5% 5 Year 6.3% 10 Year 15 Year Since launch 6.8% Historical performance (Yearly) on absolute basis
Year Returns 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% 2013 9.4% Fund Manager information for Aditya Birla Sun Life Money Manager Fund
Name Since Tenure Kaustubh Gupta 15 Jul 11 12.14 Yr. Anuj Jain 22 Mar 21 2.45 Yr. Mohit Sharma 1 Apr 17 6.42 Yr. Dhaval Joshi 21 Nov 22 0.78 Yr. Data below for Aditya Birla Sun Life Money Manager Fund as on 31 Jul 23
Asset Allocation
Asset Class Value Cash 89.14% Debt 10.86% Debt Sector Allocation
Sector Value Cash Equivalent 38.43% Government 32.74% Corporate 28.83% Credit Quality
Rating Value AAA 100% Top Securities Holdings / Portfolio
Name Holding Value Quantity 182 DTB 21122023
Sovereign Bonds | -2% ₹284 Cr 29,000,000 182 DTB 26102023
Sovereign Bonds | -2% ₹277 Cr 28,000,000 7.68% Govt Stock 2023
Sovereign Bonds | -2% ₹250 Cr 25,000,000 364 DTB 07122023
Sovereign Bonds | -2% ₹246 Cr 25,000,000 364 DTB 08022024
Sovereign Bonds | -1% ₹233 Cr 24,000,000 182 DTB 11012024
Sovereign Bonds | -1% ₹195 Cr 20,000,000 364 DTB 07032024
Sovereign Bonds | -1% ₹193 Cr 20,000,000 India (Republic of)
- | -1% ₹152 Cr 15,500,000 182 DTB 14122023
Sovereign Bonds | -1% ₹123 Cr 12,500,000 7.32% Govt Stock 2024
Sovereign Bonds | -0% ₹75 Cr 7,500,000 4. Aditya Birla Sun Life Corporate Bond Fund
CAGR/Annualized return of 9% since its launch. Ranked 1 in Corporate Bond category. Return for 2022 was 4.1% , 2021 was 4% and 2020 was 11.9% . Aditya Birla Sun Life Corporate Bond Fund
Growth Launch Date 3 Mar 97 NAV (22 Aug 23) ₹97.1847 ↑ 0.01 (0.01 %) Net Assets (Cr) ₹17,961 on 31 Jul 23 Category Debt - Corporate Bond AMC Birla Sun Life Asset Management Co Ltd Rating ☆☆☆☆☆ Risk Moderately Low Expense Ratio 0.47 Sharpe Ratio 0.69 Information Ratio 0 Alpha Ratio 0 Min Investment 1,000 Min SIP Investment 100 Exit Load NIL Yield to Maturity 7.62% Effective Maturity 2 Years 9 Months 22 Days Modified Duration 2 Years 2 Months 5 Days Growth of 10,000 investment over the years.
Date Value 31 Aug 18 ₹10,000 31 Aug 19 ₹11,052 31 Aug 20 ₹12,260 31 Aug 21 ₹13,050 31 Aug 22 ₹13,470 31 Aug 23 ₹14,398 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 1.5% 6 Month 3.9% 1 Year 6.8% 3 Year 5.4% 5 Year 7.5% 10 Year 15 Year Since launch 9% Historical performance (Yearly) on absolute basis
Year Returns 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% 2013 8.4% Fund Manager information for Aditya Birla Sun Life Corporate Bond Fund
Name Since Tenure Kaustubh Gupta 12 Apr 21 2.39 Yr. Dhaval Joshi 21 Nov 22 0.78 Yr. Data below for Aditya Birla Sun Life Corporate Bond Fund as on 31 Jul 23
Asset Allocation
Asset Class Value Cash 4.97% Debt 95.03% Debt Sector Allocation
Sector Value Corporate 55.28% Government 38.44% Cash Equivalent 4.97% Securitized 1.31% Credit Quality
Rating Value AAA 100% Top Securities Holdings / Portfolio
Name Holding Value Quantity 7.26% Govt Stock 2033
Sovereign Bonds | -6% ₹1,032 Cr 102,589,300
↑ 12,500,000 8.51% Govt Stock 2033
Sovereign Bonds | -5% ₹830 Cr 81,808,500
↑ 9,000,000 7.06% Govt Stock 2028
Sovereign Bonds | -4% ₹717 Cr 72,000,000
↑ 32,000,000 7.38% Govt Stock 2027
Sovereign Bonds | -3% ₹629 Cr 62,500,000
↑ 1,000,000 Mahindra & Mahindra Financial Services Ltd
Debentures | -3% ₹602 Cr 60,000 7.93% Govt Stock 2034
Sovereign Bonds | -3% ₹579 Cr 58,137,700
↓ -2,500,000 National Bank For Agriculture And Rural Development
Debentures | -3% ₹528 Cr 5,300 Rural Electrification Corporation Limited
Debentures | -2% ₹423 Cr 42,500 07.18 Goi 2037
Sovereign Bonds | -2% ₹380 Cr 38,192,600
↑ 4,000,000 Small Industries Development Bank Of India
Debentures | -2% ₹360 Cr 36,050 5. Aditya Birla Sun Life Savings Fund
CAGR/Annualized return of 7.4% since its launch. Ranked 6 in Ultrashort Bond category. Return for 2022 was 4.8% , 2021 was 3.9% and 2020 was 7% . Aditya Birla Sun Life Savings Fund
Growth Launch Date 16 Apr 03 NAV (22 Aug 23) ₹477.445 ↑ 0.09 (0.02 %) Net Assets (Cr) ₹14,783 on 31 Jul 23 Category Debt - Ultrashort Bond AMC Birla Sun Life Asset Management Co Ltd Rating ☆☆☆☆☆ Risk Moderately Low Expense Ratio 0.52 Sharpe Ratio 1.11 Information Ratio 0 Alpha Ratio 0 Min Investment 1,000 Min SIP Investment 1,000 Exit Load NIL Yield to Maturity 7.39% Effective Maturity 5 Months 8 Days Modified Duration 5 Months 1 Day Growth of 10,000 investment over the years.
Date Value 31 Aug 18 ₹10,000 31 Aug 19 ₹10,897 31 Aug 20 ₹11,732 31 Aug 21 ₹12,264 31 Aug 22 ₹12,745 31 Aug 23 ₹13,620 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 0.6% 3 Month 1.7% 6 Month 3.7% 1 Year 6.8% 3 Year 5.1% 5 Year 6.4% 10 Year 15 Year Since launch 7.4% Historical performance (Yearly) on absolute basis
Year Returns 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% 2013 9.5% Fund Manager information for Aditya Birla Sun Life Savings Fund
Name Since Tenure Sunaina Cunha 20 Jun 14 9.21 Yr. Kaustubh Gupta 15 Jul 11 12.14 Yr. Monika Gandhi 22 Mar 21 2.45 Yr. Dhaval Joshi 21 Nov 22 0.78 Yr. Data below for Aditya Birla Sun Life Savings Fund as on 31 Jul 23
Asset Allocation
Asset Class Value Cash 54.34% Debt 45.66% Debt Sector Allocation
Sector Value Corporate 46.88% Cash Equivalent 30.31% Government 22.81% Credit Quality
Rating Value AA 20.68% AAA 79.32% Top Securities Holdings / Portfolio
Name Holding Value Quantity HDFC Bank Limited
Debentures | -4% ₹597 Cr 6,000 182 DTB 21122023
Sovereign Bonds | -3% ₹465 Cr 47,500,000 Tata Realty And Infrastructure Limited
Debentures | -2% ₹360 Cr 36,000 Hindalco Industries Limited
Debentures | -2% ₹350 Cr 35,000 Bharti Telecom Limited
Debentures | -2% ₹325 Cr 3,250 182 DTB 07122023
Sovereign Bonds | -2% ₹295 Cr 30,000,000 Cholamandalam Investment And Fin. Co. Ltd
Debentures | -2% ₹250 Cr 2,500 HDFC Bank Limited
Debentures | -2% ₹245 Cr 2,450 India (Republic of)
- | -1% ₹173 Cr 17,500,000 Reliance Industries Limited
Debentures | -1% ₹150 Cr 1,500
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 2023 - 2024 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