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Best Debt Mutual Funds 2022

Updated on November 27, 2022 , 59236 views

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.

Best Debt Funds

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 2022 - 2023.

Why To Invest in Debt Mutual Funds?

a. 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.

b. In debt funds, investors can withdraw required money from the investment at any point in time and can let the remaining money stay invested.

c. 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.

d. 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.

e. 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.

a. 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.

b. 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 22 - 23

Top 5 Liquid Mutual Funds

Top Liquid funds with AUM/Net Assets > 10,000 Crore.

FundNAVNet Assets (Cr)Min Investment1 MO (%)3 MO (%)6 MO (%)1 YR (%)2021 (%)Debt Yield (YTM)Mod. DurationEff. Maturity
Axis Liquid Fund Growth ₹2,428.78
↑ 0.46
₹29,703 500 0.61.52.84.63.36.32%1M 11D1M 12D
Aditya Birla Sun Life Liquid Fund Growth ₹351.693
↑ 0.07
₹35,107 5,000 0.61.52.74.53.36.66%1M 6D1M 6D
Nippon India Liquid Fund  Growth ₹5,333.3
↑ 1.01
₹23,692 100 0.61.52.74.53.26.39%1M 28D2M 2D
Tata Liquid Fund Growth ₹3,441.48
↑ 0.64
₹19,735 5,000 0.61.52.74.53.26.31%1M 11D1M 11D
ICICI Prudential Liquid Fund Growth ₹323.342
↑ 0.06
₹46,470 500 0.51.42.74.53.26.27%1M 10D1M 14D
Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 29 Nov 22

Top 5 Ultra Short Term Bond Mutual Funds

Top Ultra Short Bond funds with AUM/Net Assets > 1,000 Crore.

FundNAVNet Assets (Cr)Min Investment3 MO (%)6 MO (%)1 YR (%)3 YR (%)2021 (%)Debt Yield (YTM)Mod. DurationEff. Maturity
Aditya Birla Sun Life Savings Fund Growth ₹453.645
↑ 0.10
₹14,075 1,000 1.42.74.55.23.97.45%6M6M 11D
UTI Ultra Short Term Fund Growth ₹3,555.04
↑ 0.71
₹2,073 5,000 1.22.53.95.26.16.87%4M 23D4M 28D
ICICI Prudential Ultra Short Term Fund Growth ₹23.0887
↑ 0.00
₹11,752 5,000 1.32.64.3546.92%4M 2D4M 20D
Kotak Savings Fund Growth ₹35.8919
↑ 0.01
₹12,853 5,000 1.32.64.24.43.26.89%4M 13D6M 4D
SBI Magnum Ultra Short Duration Fund Growth ₹4,981.62
↑ 0.94
₹11,433 5,000 1.32.64.14.53.46.76%5M 8D5M 19D
Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 29 Nov 22

Top and Best Floating Rate Mutual Funds

FundNAVNet Assets (Cr)Min Investment3 MO (%)6 MO (%)1 YR (%)3 YR (%)2021 (%)Debt Yield (YTM)Mod. DurationEff. Maturity
Aditya Birla Sun Life Floating Rate Fund - Long Term Growth ₹286.2
↑ 0.05
₹13,354 1,000 1.42.84.45.63.67.47%6M 14D1Y 2M 16D
ICICI Prudential Floating Interest Fund Growth ₹348.98
↑ 0.17
₹11,650 5,000 1.83.63.85.83.87.1%7M 20D9Y 2M 23D
Nippon India Floating Rate Fund Growth ₹37.0689
↑ 0.00
₹8,482 5,000 1.32.73.56.23.77.27%1Y 2M 23D1Y 6M 18D
Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 29 Nov 22

Top 5 Best Money Market Mutual Funds

FundNAVNet Assets (Cr)Min Investment3 MO (%)6 MO (%)1 YR (%)3 YR (%)2021 (%)Debt Yield (YTM)Mod. DurationEff. Maturity
Aditya Birla Sun Life Money Manager Fund Growth ₹305.508
↑ 0.06
₹12,904 1,000 1.42.84.653.87.25%4M 10D4M 10D
UTI Money Market Fund Growth ₹2,545.53
↑ 0.55
₹7,324 10,000 1.42.84.64.83.76.83%4M 24D4M 25D
Kotak Money Market Scheme Growth ₹3,713.61
↑ 0.74
₹13,632 5,000 1.42.84.64.73.76.81%4M 28D4M 28D
ICICI Prudential Money Market Fund Growth ₹313.547
↑ 0.07
₹10,979 500 1.42.84.44.83.76.72%3M 22D4M 1D
L&T Money Market Fund Growth ₹21.9748
↑ 0.01
₹713 10,000 1.32.43.842.96.62%4M 10D4M 17D
Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 29 Nov 22

Top 5 Short Term Bond Mutual Funds

FundNAVNet Assets (Cr)3 MO (%)6 MO (%)1 YR (%)3 YR (%)2021 (%)Debt Yield (YTM)Mod. DurationEff. Maturity
PGIM India Short Maturity Fund Growth ₹37.4629
↓ -0.01
₹251.22.634.536.59%1Y 4D1Y 2M 8D
ICICI Prudential Short Term Fund Growth ₹49.4937
↑ 0.01
₹14,7271.73.64.36.33.97.35%1Y 5M 12D4Y 10M 20D
Aditya Birla Sun Life Short Term Opportunities Fund Growth ₹39.293
↓ 0.00
₹5,8571.233.96.13.87.74%1Y 5M 23D1Y 11M 19D
UTI Short Term Income Fund Growth ₹26.2059
↑ 0.00
₹2,1141.32.63.47.38.47.23%1Y 2M 12D1Y 5M 16D
Nippon India Short Term Fund Growth ₹43.5255
↑ 0.01
₹6,6391.12.635.54.47.53%2Y 29D2Y 5M 19D
Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 29 Nov 22

Top 5 Medium to Long Term Bond Mutual Funds

Top Medium to Long Term Bond funds with AUM/Net Assets > 500 Crore.

FundNAVNet Assets (Cr)3 MO (%)6 MO (%)1 YR (%)3 YR (%)2021 (%)Debt Yield (YTM)Mod. DurationEff. Maturity
SBI Magnum Income Fund Growth ₹58.2322
↓ -0.04
₹1,5281.63.62.66.43.67.19%3Y 10M 20D6Y 18D
ICICI Prudential Bond Fund Growth ₹32.7678
↓ 0.00
₹2,4221.53.82.65.72.97%2Y 9M 7D5Y 8M 26D
Aditya Birla Sun Life Income Fund Growth ₹104.041
↓ -0.06
₹1,5381.23.226.147.44%3Y 2M 1D3Y 11M 1D
Kotak Bond Fund Growth ₹63.7038
↓ 0.00
₹1,5421.23.11.35.42.47.43%2Y 5M 19D6Y 8M 5D
HDFC Income Fund Growth ₹48.1902
↓ 0.00
₹5291.230.64.12.17.37%4Y 6M 11D8Y 24D
Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 29 Nov 22

Top 5 Banking and PSU Debt Mutual Funds

FundNAVNet Assets (Cr)3 MO (%)6 MO (%)1 YR (%)3 YR (%)2021 (%)Debt Yield (YTM)Mod. DurationEff. Maturity
UTI Banking & PSU Debt Fund Growth ₹18.1967
↓ -0.01
₹5190.83.210.17.22.87.47%3Y 5M 16D4Y 3M 11D
HDFC Banking and PSU Debt Fund Growth ₹19.0131
↓ 0.00
₹4,9441.22.635.73.77.24%1Y 4M 24D2Y 5M 14D
ICICI Prudential Banking and PSU Debt Fund Growth ₹26.9704
↓ 0.00
₹7,5421.53.23.85.94.27.19%1Y 7M 10D6Y 3M 4D
Kotak Banking and PSU Debt fund Growth ₹54.0659
↓ -0.02
₹6,4461.53.13.55.93.97.5%1Y 11M 26D5Y 6M 25D
Aditya Birla Sun Life Banking & PSU Debt Fund Growth ₹302.965
↓ -0.02
₹8,2341.12.73.45.93.67.46%1Y 11M 16D3Y 7D
Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 29 Nov 22

Top 5 Credit Risk Mutual Funds

Top Credit Risk funds with AUM/Net Assets > 500 Crore.

FundNAVNet Assets (Cr)3 MO (%)6 MO (%)1 YR (%)3 YR (%)2021 (%)Debt Yield (YTM)Mod. DurationEff. Maturity
Axis Credit Risk Fund Growth ₹17.6119
↑ 0.00
₹6201.12.93.8668.23%1Y 5M 12D1Y 11M 5D
SBI Credit Risk Fund Growth ₹37.0948
↓ -0.01
₹2,8761.32.946.358%1Y 7M 6D2Y 7M 17D
HDFC Credit Risk Debt Fund Growth ₹19.8583
↑ 0.00
₹8,5241.133.5778.62%2Y 20D2Y 8M 26D
Kotak Credit Risk Fund Growth ₹24.5131
↑ 0.01
₹1,4640.72.20.64.25.38.1%1Y 6M 11D2Y 10M 17D
Nippon India Credit Risk Fund Growth ₹28.411
↑ 0.00
₹1,0091.433.83.613.58.3%1Y 7M 24D1Y 11M 12D
Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 29 Nov 22

Top 5 Dynamic Bond Mutual Funds

Top Dynamic Bond funds with AUM/Net Assets > 500 Crore.

FundNAVNet Assets (Cr)3 MO (%)6 MO (%)1 YR (%)3 YR (%)2021 (%)Debt Yield (YTM)Mod. DurationEff. Maturity
ICICI Prudential Long Term Plan Growth ₹30.2291
↑ 0.01
₹5,9971.74.14.16.94.37.28%1Y 7M 17D5Y 7M 17D
SBI Dynamic Bond Fund Growth ₹29.3399
↓ -0.02
₹2,4022.43.93.95.526.27%1Y 1M 17D1Y 7M 28D
Aditya Birla Sun Life Dynamic Bond Fund Growth ₹37.9004
↓ 0.00
₹1,7751.25.95.76.64.97.73%2Y 14D2Y 10M 10D
Axis Dynamic Bond Fund Growth ₹24.3579
↓ 0.00
₹1,6701.23.91.863.97.59%5Y 2M 12D7Y 2M 23D
HDFC Dynamic Debt Fund Growth ₹74.2563
↑ 0.02
₹5051.22.71.15.97.47.06%2Y 4M 26D6Y 27D
Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 29 Nov 22

Top 5 Corporate Bond Mutual Funds

Top Corporate Bond funds with AUM/Net Assets > 500 Crore.

FundNAVNet Assets (Cr)3 MO (%)6 MO (%)1 YR (%)3 YR (%)2021 (%)Debt Yield (YTM)Mod. DurationEff. Maturity
Aditya Birla Sun Life Corporate Bond Fund Growth ₹92.3382
↑ 0.01
₹12,6031.33.13.76.547.66%1Y 4M 17D2Y 3M 7D
HDFC Corporate Bond Fund Growth ₹26.6432
↓ 0.00
₹21,4731.23.136.13.97.41%2Y 4M 27D4Y 9M 15D
Nippon India Prime Debt Fund Growth ₹49.021
↑ 0.01
₹1,5271.43.24.16.24.77.78%1Y 9M 11D2Y 1M 13D
ICICI Prudential Corporate Bond Fund Growth ₹24.4464
↑ 0.01
₹14,9101.63.346.34.17.34%10M 17D4Y 7M 17D
Kotak Corporate Bond Fund Standard Growth ₹3,102.79
↓ -0.11
₹8,6611.32.73.45.63.87.45%1Y 2M 16D3Y 1M 13D
Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 29 Nov 22

Top 5 Gilt Mutual Funds

Top GILT funds with AUM/Net Assets > 500 Crore.

FundNAVNet Assets (Cr)3 MO (%)6 MO (%)1 YR (%)3 YR (%)2021 (%)Debt Yield (YTM)Mod. DurationEff. Maturity
SBI Magnum Gilt Fund Growth ₹53.9422
↓ -0.03
₹3,8532.34.13.96.336.26%1Y 5M 19D2Y 22D
ICICI Prudential Gilt Fund Growth ₹83.5493
↑ 0.03
₹2,5231.742.56.83.86.82%1Y 6M 11D9Y 2M 5D
UTI Gilt Fund Growth ₹51.7258
↓ -0.01
₹5201.432.24.92.36.38%1Y 9M 4D2Y 4M 20D
Nippon India Gilt Securities Fund Growth ₹31.5008
↑ 0.00
₹1,1191.53.41.451.87.38%4Y 11M 19D6Y 8M 1D
Aditya Birla Sun Life Government Securities Fund Growth ₹66.8268
↓ -0.02
₹1,2880.831.45.53.67.48%2Y 10M 6D3Y 4M 6D
Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 29 Nov 22

1. UTI Banking & PSU Debt Fund

The investment objective of the scheme is to generate steady and reasonable income, with low risk and high level of liquidity from a portfolio of predominantly debt & money market securities by Banks and Public Sector Undertakings (PSUs).

UTI Banking & PSU Debt Fund is a Debt - Banking & PSU Debt fund was launched on 3 Feb 14. It is a fund with Moderate risk and has given a CAGR/Annualized return of 7% since its launch.  Ranked 3 in Banking & PSU Debt category.  Return for 2021 was 2.8% , 2020 was 8.9% and 2019 was -1% .

Below is the key information for UTI Banking & PSU Debt Fund

UTI Banking & PSU Debt Fund
Growth
Launch Date 3 Feb 14
NAV (29 Nov 22) ₹18.1967 ↓ -0.01   (-0.05 %)
Net Assets (Cr) ₹519 on 31 Oct 22
Category Debt - Banking & PSU Debt
AMC UTI Asset Management Company Ltd
Rating
Risk Moderate
Expense Ratio 0.31
Sharpe Ratio 0.85
Information Ratio 0
Alpha Ratio 0
Min Investment 5,000
Min SIP Investment 500
Exit Load NIL
Yield to Maturity 7.47%
Effective Maturity 4 Years 3 Months 11 Days
Modified Duration 3 Years 5 Months 16 Days

Growth of 10,000 investment over the years.

DateValue
31 Oct 17₹10,000
31 Oct 18₹10,500
31 Oct 19₹10,504
31 Oct 20₹11,459
31 Oct 21₹11,801
31 Oct 22₹12,904

UTI Banking & PSU Debt Fund SIP Returns

   
My Monthly Investment:
Investment Tenure:
Years
Expected Annual Returns:
%
Total investment amount is ₹180,000
expected amount after 3 Years is ₹197,169.
Net Profit of ₹17,169
Invest Now

Returns for UTI Banking & PSU Debt Fund

Returns up to 1 year are on absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 29 Nov 22

DurationReturns
1 Month 1%
3 Month 0.8%
6 Month 3.2%
1 Year 10.1%
3 Year 7.2%
5 Year 5.4%
10 Year
15 Year
Since launch 7%
Historical performance (Yearly) on absolute basis
YearReturns
2021 2.8%
2020 8.9%
2019 -1%
2018 6.8%
2017 6.4%
2016 11.7%
2015 8.6%
2014
2013
2012
Fund Manager information for UTI Banking & PSU Debt Fund
NameSinceTenure
Anurag Mittal1 Dec 210.92 Yr.

Data below for UTI Banking & PSU Debt Fund as on 31 Oct 22

Asset Allocation
Asset ClassValue
Cash4.23%
Debt95.77%
Debt Sector Allocation
SectorValue
Government48.61%
Corporate47.15%
Cash Equivalent4.23%
Credit Quality
RatingValue
AAA100%
Top Securities Holdings / Portfolio
NameHoldingValueQuantity
7.38% Govt Stock 2027
Sovereign Bonds | -
22%₹115 Cr1,150,000,000
↓ -100,000,000
National Housing Bank
Debentures | -
8%₹40 Cr400
Power Finance Corporation Ltd.
Debentures | -
7%₹35 Cr350
Axis Bank Limited
Debentures | -
6%₹30 Cr300
National Bank For Agriculture And Rural Development
Debentures | -
5%₹26 Cr250
Export Import Bank Of India
Debentures | -
5%₹25 Cr250
Indian Railway Finance Corporation Limited
Debentures | -
5%₹25 Cr250
Small Industries Development Bank Of India
Debentures | -
5%₹25 Cr250
Rec Limited
Debentures | -
5%₹25 Cr250
ICICI Bank Limited
Debentures | -
5%₹23 Cr250

2. UTI Dynamic Bond Fund

The investment objective of the scheme is to generate optimal returns with adequate liquidity through active management of the portfolio, by investing in debt and money market instruments. However, there can be no assurance that the investment objective of the scheme will be realized.

UTI Dynamic Bond Fund is a Debt - Dynamic Bond fund was launched on 16 Jun 10. It is a fund with Moderate risk and has given a CAGR/Annualized return of 7.8% since its launch.  Ranked 3 in Dynamic Bond category.  Return for 2021 was 10.8% , 2020 was 5.9% and 2019 was -3.9% .

Below is the key information for UTI Dynamic Bond Fund

UTI Dynamic Bond Fund
Growth
Launch Date 16 Jun 10
NAV (29 Nov 22) ₹25.616 ↓ 0.00   (-0.01 %)
Net Assets (Cr) ₹421 on 31 Oct 22
Category Debt - Dynamic Bond
AMC UTI Asset Management Company Ltd
Rating
Risk Moderate
Expense Ratio 1.59
Sharpe Ratio 0.61
Information Ratio 0
Alpha Ratio 0
Min Investment 10,000
Min SIP Investment 500
Exit Load NIL
Yield to Maturity 6.67%
Effective Maturity 1 Year 11 Months 26 Days
Modified Duration 1 Year 6 Months 7 Days

Growth of 10,000 investment over the years.

DateValue
31 Oct 17₹10,000
31 Oct 18₹10,170
31 Oct 19₹9,894
31 Oct 20₹10,505
31 Oct 21₹11,696
31 Oct 22₹12,757

UTI Dynamic Bond Fund SIP Returns

   
My Monthly Investment:
Investment Tenure:
Years
Expected Annual Returns:
%
Total investment amount is ₹180,000
expected amount after 3 Years is ₹197,169.
Net Profit of ₹17,169
Invest Now

Returns for UTI Dynamic Bond Fund

Returns up to 1 year are on absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 29 Nov 22

DurationReturns
1 Month 0.5%
3 Month 1%
6 Month 2.1%
1 Year 9.4%
3 Year 8.7%
5 Year 5.1%
10 Year
15 Year
Since launch 7.8%
Historical performance (Yearly) on absolute basis
YearReturns
2021 10.8%
2020 5.9%
2019 -3.9%
2018 5.2%
2017 4.2%
2016 14.9%
2015 6.9%
2014 14.7%
2013 7.6%
2012 11.2%
Fund Manager information for UTI Dynamic Bond Fund
NameSinceTenure
Sudhir Agarwal1 Dec 210.92 Yr.

Data below for UTI Dynamic Bond Fund as on 31 Oct 22

Asset Allocation
Asset ClassValue
Cash80.27%
Debt19.73%
Debt Sector Allocation
SectorValue
Cash Equivalent60.68%
Government19.87%
Corporate19.45%
Credit Quality
RatingValue
AA11.42%
AAA88.58%
Top Securities Holdings / Portfolio
NameHoldingValueQuantity
182 Dtb 24112022
Sovereign Bonds | -
24%₹99 Cr1,000,000,000
↑ 1,000,000,000
182 Dtb 29122022
Sovereign Bonds | -
18%₹74 Cr750,000,000
182 DTB 23032023
Sovereign Bonds | -
12%₹49 Cr500,000,000
Punjab National Bank
Debentures | -
2%₹10 Cr100
Can Fin Homes Limited
Debentures | -
2%₹10 Cr100
Piramal Capital & Housing Finance Limited
Debentures | -
2%₹10 Cr123,219
Tata Capital Limited
Debentures | -
1%₹5 Cr50
Net Current Assets
Net Current Assets | -
19%₹79 Cr
ICICI Bank Limited
Certificate of Deposit | -
8%₹33 Cr350,000,000
↑ 350,000,000
Indian Bank
Certificate of Deposit | -
6%₹25 Cr250,000,000
↑ 250,000,000

3. PGIM India Credit Risk Fund

(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 CAGR/Annualized return of 6.3% since its launch.  Ranked 2 in Credit Risk category. .

Below is the key information for PGIM India Credit Risk Fund

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.

DateValue
31 Oct 17₹10,000
31 Oct 18₹10,361
31 Oct 19₹10,805
31 Oct 20₹10,377
31 Oct 21₹11,482

PGIM India Credit Risk Fund SIP Returns

   
My Monthly Investment:
Investment Tenure:
Years
Expected Annual Returns:
%
Total investment amount is ₹180,000
expected amount after 3 Years is ₹194,235.
Net Profit of ₹14,235
Invest Now

Returns for PGIM India Credit Risk Fund

Returns up to 1 year are on absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 29 Nov 22

DurationReturns
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
YearReturns
2021
2020
2019
2018
2017
2016
2015
2014
2013
2012
Fund Manager information for PGIM India Credit Risk Fund
NameSinceTenure

Data below for PGIM India Credit Risk Fund as on 31 Dec 21

Asset Allocation
Asset ClassValue
Debt Sector Allocation
SectorValue
Credit Quality
RatingValue
Top Securities Holdings / Portfolio
NameHoldingValueQuantity

4. Aditya Birla Sun Life Money Manager Fund

(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 CAGR/Annualized return of 6.7% since its launch.  Ranked 7 in Money Market category.  Return for 2021 was 3.8% , 2020 was 6.6% and 2019 was 8% .

Below is the key information for Aditya Birla Sun Life Money Manager Fund

Aditya Birla Sun Life Money Manager Fund
Growth
Launch Date 13 Oct 05
NAV (29 Nov 22) ₹305.508 ↑ 0.06   (0.02 %)
Net Assets (Cr) ₹12,904 on 31 Oct 22
Category Debt - Money Market
AMC Birla Sun Life Asset Management Co Ltd
Rating
Risk Low
Expense Ratio 0.32
Sharpe Ratio -0.42
Information Ratio 0
Alpha Ratio 0
Min Investment 1,000
Min SIP Investment 1,000
Exit Load NIL
Yield to Maturity 7.25%
Effective Maturity 4 Months 10 Days
Modified Duration 4 Months 10 Days

Growth of 10,000 investment over the years.

DateValue
31 Oct 17₹10,000
31 Oct 18₹10,745
31 Oct 19₹11,676
31 Oct 20₹12,486
31 Oct 21₹12,959
31 Oct 22₹13,520

Aditya Birla Sun Life Money Manager Fund SIP Returns

   
My Monthly Investment:
Investment Tenure:
Years
Expected Annual Returns:
%
Total investment amount is ₹180,000
expected amount after 3 Years is ₹200,132.
Net Profit of ₹20,132
Invest Now

Returns for Aditya Birla Sun Life Money Manager Fund

Returns up to 1 year are on absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 29 Nov 22

DurationReturns
1 Month 0.6%
3 Month 1.4%
6 Month 2.8%
1 Year 4.6%
3 Year 5%
5 Year 6.2%
10 Year
15 Year
Since launch 6.7%
Historical performance (Yearly) on absolute basis
YearReturns
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%
2012 9.8%
Fund Manager information for Aditya Birla Sun Life Money Manager Fund
NameSinceTenure
Kaustubh Gupta15 Jul 1111.31 Yr.
Anuj Jain22 Mar 211.61 Yr.
Mohit Sharma1 Apr 175.59 Yr.

Data below for Aditya Birla Sun Life Money Manager Fund as on 31 Oct 22

Asset Allocation
Asset ClassValue
Cash93.97%
Debt6.03%
Debt Sector Allocation
SectorValue
Cash Equivalent44.21%
Corporate37.13%
Government18.66%
Credit Quality
RatingValue
AAA100%
Top Securities Holdings / Portfolio
NameHoldingValueQuantity
182 Dtb 29122022
Sovereign Bonds | -
2%₹247 Cr25,000,000
182 Dtb 08122022
Sovereign Bonds | -
2%₹223 Cr22,500,000
6.84% Govt Stock 2022
Sovereign Bonds | -
1%₹185 Cr18,500,000
07.57 CG Sdl 2023
Sovereign Bonds | -
1%₹151 Cr15,000,000
08.60 HR Sdl 2023
Sovereign Bonds | -
1%₹131 Cr13,000,000
364 Dtb 12012023
Sovereign Bonds | -
1%₹128 Cr13,000,000
↑ 13,000,000
182 DTB 02032023
Sovereign Bonds | -
1%₹112 Cr11,500,000
364 Dtb 02032023
Sovereign Bonds | -
1%₹98 Cr10,000,000
08.21 HR UDAY 2023
Domestic Bonds | -
1%₹75 Cr7,500,000
08.62 MH Sdl 2023
Sovereign Bonds | -
0%₹60 Cr6,000,000

5. JM Liquid Fund

(Erstwhile JM High Liquidity Fund)

To provide income by way of dividend (dividend plans) and capital gains (growth plan) through investing in debt and money market instruments.

JM Liquid Fund is a Debt - Liquid Fund fund was launched on 31 Dec 97. It is a fund with Low risk and has given a CAGR/Annualized return of 7.4% since its launch.  Ranked 3 in Liquid Fund category.  Return for 2021 was 3.3% , 2020 was 4% and 2019 was 6.6% .

Below is the key information for JM Liquid Fund

JM Liquid Fund
Growth
Launch Date 31 Dec 97
NAV (29 Nov 22) ₹59.703 ↑ 0.01   (0.02 %)
Net Assets (Cr) ₹1,553 on 15 Nov 22
Category Debt - Liquid Fund
AMC JM Financial Asset Management Limited
Rating
Risk Low
Expense Ratio 0.21
Sharpe Ratio -2.08
Information Ratio -5.38
Alpha Ratio -0.22
Min Investment 5,000
Min SIP Investment 500
Exit Load NIL
Yield to Maturity 6.24%
Effective Maturity 1 Month 6 Days
Modified Duration 1 Month 4 Days

Growth of 10,000 investment over the years.

DateValue
31 Oct 17₹10,000
31 Oct 18₹10,721
31 Oct 19₹11,474
31 Oct 20₹11,972
31 Oct 21₹12,355
31 Oct 22₹12,890

JM Liquid Fund SIP Returns

   
My Monthly Investment:
Investment Tenure:
Years
Expected Annual Returns:
%
Total investment amount is ₹180,000
expected amount after 3 Years is ₹197,169.
Net Profit of ₹17,169
Invest Now

Returns for JM Liquid Fund

Returns up to 1 year are on absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 29 Nov 22

DurationReturns
1 Month 0.5%
3 Month 1.5%
6 Month 2.7%
1 Year 4.5%
3 Year 4%
5 Year 5.2%
10 Year
15 Year
Since launch 7.4%
Historical performance (Yearly) on absolute basis
YearReturns
2021 3.3%
2020 4%
2019 6.6%
2018 7.4%
2017 6.7%
2016 7.7%
2015 8.4%
2014 9.1%
2013 9.3%
2012 9.6%
Fund Manager information for JM Liquid Fund
NameSinceTenure
Shalini Tibrewala31 Dec 9724.85 Yr.
Naghma Khoja21 Oct 211.03 Yr.

Data below for JM Liquid Fund as on 15 Nov 22

Asset Allocation
Asset ClassValue
Cash100%
Debt Sector Allocation
SectorValue
Cash Equivalent84.77%
Government8.21%
Corporate7.02%
Credit Quality
RatingValue
AA0.92%
AAA99.08%
Top Securities Holdings / Portfolio
NameHoldingValueQuantity
Treps-Triparty Repo
CBLO/Reverse Repo | -
41%₹861 Cr00
Small Industries Development Bank Of India
Commercial Paper | -
5%₹100 Cr2,000
↑ 2,000
182 Dtb 10112022
Sovereign Bonds | -
4%₹85 Cr8,500,000
Reliance Jio Infocomm Limited
Commercial Paper | -
4%₹74 Cr1,500
Reliance Retail Ventures Limited
Commercial Paper | -
2%₹50 Cr1,000
↑ 1,000
Punjab National Bank
Certificate of Deposit | -
2%₹50 Cr1,000
↑ 1,000
LIC Housing Finance Limited
Commercial Paper | -
2%₹50 Cr1,000
↑ 1,000
Reliance Retail Ventures Limited
Commercial Paper | -
2%₹50 Cr1,000
Indian Bank
Certificate of Deposit | -
2%₹50 Cr1,000
Larsen And Toubro Limited
Commercial Paper | -
2%₹50 Cr1,000

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.

How-to-select-best-debt-funds

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?

  1. Open Free Investment Account for Lifetime at Fincash.com.

  2. Complete your Registration and KYC Process

  3. Upload Documents (PAN, Aadhaar, etc.). And, You are Ready to Invest!

    Get Started

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 2022 - 2023 and start investing!_

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.
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Amol Vyas, posted on 14 Jan 19 5:50 PM

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

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